Gold prices remained lackluster in the domestic futures market on Wednesday morning, as traders awaited the outcome of the US Federal Reserve’s policy meeting. The anticipation is high that the US central bank will announce a third interest rate cut later today, along with providing guidance on its interest rate path for 2025. As of 9:25 AM, the February 5 expiry of MCX Gold traded 0.03% lower at ₹76,850 per 10 grams.
On the international front, gold prices edged higher, supported by expectations that the US Federal Reserve would implement a 25 basis point rate cut. However, the rise of the US dollar, an increase in US treasury yields, mixed economic data from the US, and reports of easing geopolitical tensions, particularly regarding the Gaza ceasefire, limited the gains in the yellow metal.
The two-day policy meeting of the Federal Open Market Committee (FOMC), which began on December 17, is set to conclude today. Market participants are closely watching for any changes to the central bank’s economic projections and its “dot plot,” which could offer crucial insights into its interest rate outlook for 2025 and beyond. In addition to the Fed’s decision, attention will also turn to upcoming US economic data, including GDP and inflation figures, which are expected later this week.
Manav Modi, a commodity research analyst at Motilal Oswal Financial Services, highlighted that the US Fed’s interest rate decision and updates on its monetary policy trajectory will be pivotal for gold prices. “In this meeting, along with any rate changes, the Fed’s updated economic projections and the dot plot, which could reshape expectations for the rate trajectory through 2025 and 2026, will be in focus,” Modi stated.
Modi also pointed out that recent stronger-than-expected US retail sales in November, coupled with warmer inflation data, suggest that the Fed could pause rate cuts in January. Meanwhile, industrial production has remained stable, and geopolitical developments, including the ceasefire discussions between Israel and Qatar, have affected market sentiment. The week ahead will also bring key US housing, GDP, and inflation data that could further influence market dynamics.
Experts Recommend Strategies for MCX Gold
With volatility expected in the gold market due to the FOMC meeting and upcoming economic data, experts are advising caution and strategic trading in MCX Gold.
Manoj Kumar Jain, from Prithvifinmart Commodity Research, recommended buying gold on dips around ₹76,500, with a stop-loss at ₹76,200, targeting ₹77,200. Jain also outlined the key technical levels for gold and silver: on MCX, gold has support at ₹76,480-76,200 and resistance at ₹77,200-77,550, while silver has support at ₹90,100-89,500 and resistance at ₹91,650-92,400.
Rahul Kalantri, Vice President of Commodities at Mehta Equities, shared his technical outlook, stating that gold has support at $2,630-$2,615 and resistance at $2,664-$2,680 per troy ounce. Silver, he added, has support at $30.20-$29.90 and resistance at $30.70-$30.85.
As the market closely monitors the US Fed’s decision and economic data, traders are advised to stay agile and adjust their strategies based on the evolving market conditions.
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