Gold prices remained under pressure ahead of the US Federal Reserve's policy decision, with spot gold slipping 0.1% to $4,021.87 per ounce and US gold futures for August delivery declining 0.4% to $4,021.70. Analysts largely anticipated the Fed would keep interest rates unchanged, but uncertainty about future policy limited new investments. There was a 70% probability of rates remaining steady, while a 30% chance of at least a 25-basis-point increase was priced in by traders, who also considered a higher likelihood of a rate hike in September.
Domestic gold prices in Delhi experienced a sharp correction, falling by $2,640 to $147,000 per 10 grams, from the previous session's $149,640. This decline was attributed to mirroring weak international trends and the appreciation of the Indian rupee, which lowered the cost of imported gold. Investor caution dominated the bullion markets, with Saumil Gandhi, Senior Analyst – Commodities at HDFC Securities, noting gold retreated from previous gains as traders awaited the Fed's policy outcome.
Silver also faced selling pressure, with domestic prices declining by $5,200 to $224,800 per kilogram, after settling at $230,000 in the prior session. Internationally, spot silver dropped approximately 2% to nearly $57.24 per ounce. The weakening of both gold and silver was linked to a stronger US dollar and cautious investor sentiment. The Fed's guidance on inflation and future monetary policy is expected to significantly influence gold prices, as higher interest rates increase the opportunity cost of holding non-yielding assets like gold. Geopolitical developments, including those involving Iran, the US, and the Strait of Hormuz, also contributed to market uncertainty.
