MCX Gold price moves up after US Fed keeps rates unchanged; what should be your strategy for bullion today?
Federal Reserve held interest rates steady, raising expectations that the Fed may be done with interest rate hikes. According to a Reuters report, the dollar index declined 0.5 per cent, while benchmark US 10-year note yields fell to a more than two-week low. The US Federal Reserve left policy rates unchanged on Wednesday, November 1, at a 22-year high level of 5.25-5.50 per cent.
The US central bank said it is strongly committed to returning inflation to its 2 per cent objective. Experts are of the view that gold can move up on the expectations that rate hikes are near their end. In the case of low-interest rates, the opportunity cost of holding gold is also lower, making gold more attractive.
When interest rates go higher, they make other interest-bearing investments such as bonds more appealing. Besides, the geopolitical risk due to the Israel-Hamas war is also a significant factor which can support gold prices since gold is considered a safe-haven asset in times of economic uncertainty. Also Read: Fed policy outcome: Fed keeps rates steady.
What does it mean? Experts explain MCX Gold for December 5 delivery traded 0.22 per cent lower at ₹60,916 per 10 grams around 10:30 am. (Exciting news! Mint is now on WhatsApp Channels. Subscribe today and stay updated with the latest financial insights! Click here!) Manoj Kumar Jain of Prithvifinmart Commodity Research expects gold and silver prices to remain volatile this week amid volatility in the dollar index, the Israel-Hamas war and the Bank of England policy meetings but they could hold key support levels of $1,980 and $22.55 per troy ounce respectively.
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