Gold prices edged lower on Tuesday as the US dollar gained, but the losses were capped on the hopes of slower rate hikes by the Federal Reserve. Gold futures were down 0.07% at Rs 56,442 per 10 grams on
In global markets, spot gold was down 0.4% at $1,910.48 per ounce.

The dollar index gained marginally hovering about 102 levels. A stronger dollar turns gold less attractive to buyers with other currencies.

“Expectations of the Fed slowing the pace of rate hikes has been supporting gold. Currently, we are seeing a technical pullback as prices entered the overbought territory. Also, the dollar is firming slightly,” said Ajay Kedia, director at Kedia Commodities.

Markets are pricing in a 25-basis-points (bps) rate hike by the Fed in February. The US central bank slowed its pace of rate hikes to 50 bps in December after four consecutive 75 bps hikes.

Gold being a zero-yielding asset, lower rates tend to be beneficial for gold as they reduce the opportunity cost of holding the asset.

Analysts expect a volatile session ahead for gold and silver prices.
“Gold has support at $1895-1882 while resistance is at $1928-1940. Silver has support at $23.85-23.65, while resistance is at $24.40-24.62. In INR terms gold has support at Rs 56,150-55,780, while resistance is at Rs56,680, 56,780. Silver has support at Rs 69,150-68,520, while resistance is at Rs 70,120–70,680,” said Rahul Kalantri, VP-Commodities, Mehta Equities.
On Monday, prices hit $1,929, the highest since April 2022 in global markets. The US gold futures fell 0.5% to $1,912.70 whereas, silver prices were down by Rs 148 to Rs 69,638, on Tuesday.

Overall, this year, gold prices are expected to hit a record high above $2,000 an ounce, although with a little turbulence, in hopes of a slowdown of rate hikes by the Fed.