After the Fed kept interest rates unchanged, gold prices on MCX for June futures contracts rose Rs 390 or 0.55% on Thursday to trade at Rs 71,115 per 10 grams while MCX July silver contracts rose Rs 124 or 0.15% to Rs 81,351 per kg.
Gold prices increased as the Federal Reserve indicated a less aggressive stance on interest rate hikes, leading to lower U.S. treasury yields and a weaker dollar. The softening dollar, coupled with market speculation about Japan intervening to support the yen, further helped boost gold prices.
Gold’s value has risen approximately 13% this year due to strong buying by central banks and increased demand from Asian markets, notably China, amid ongoing global conflicts.
In the U.S. markets, spot gold firmed 0.3% at $2,325.02 per ounce by 0218 GMT, after climbing over 1% in the previous session. U.S. gold futures rose 1% to $2,334.40.
The Fed left interest rates unchanged on Wednesday as expected. Its latest policy statement kept key elements of its economic assessment and policy guidance intact, framing its discussion of interest rates around the conditions under which borrowing costs can be lowered.Fed Chair Jerome Powell said the next move would depend on the data but that there was unlikely to be an increase.Today, the US Dollar Index, DXY, was hovering near the 105.77 mark, rising 0.01%.“From an intraday perspective, international gold prices have started stronger this early Thursday morning in Asian trade after the tone from the Fed Chair helped ease investor concerns that the Fed will not hike rates anymore. Key triggers this week will be the non-farm payrolls data on Friday,” said Sriram Iyer, Senior Research Analyst at Reliance Securities, adding that the range for MCX gold June futures lies between 70,400 to 70,950.
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