In international markets, COMEX gold hovered near $5,009.50 per ounce, up marginally by 0.03%. Silver, however, slipped 0.57% to $79.465 per ounce, reflecting mild weakness amid a lack of fresh triggers.
Analysts attributed the subdued movement to uncertainty around the Federal Reserve’s rate trajectory. The US central bank is widely expected to keep interest rates unchanged, with markets focusing on its commentary on inflation and growth.
Persistently high energy prices, linked to the ongoing conflict in the West Asia, have increased the risk of prolonged inflation, reducing the likelihood of near-term rate cuts.
Higher interest rates typically act as a headwind for non-yielding assets such as gold and silver, limiting sharp upside in prices. At the same time, geopolitical tensions continue to provide underlying support to bullion as a safe-haven asset.
“Gold traded near $5,000 an ounce, marginally higher, but continues to witness range-bound volatility as markets remain cautious ahead of the US Fed policy decision,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities.
He added that elevated crude oil prices are keeping inflationary pressures intact, leaving limited room for a dovish shift by the Fed.
Trivedi noted that higher energy prices could delay rate cuts, capping gains in gold and keeping the broader trend slightly weak.
The current price action follows a sharp rebound in the previous session.
On March 17, gold in the Delhi bullion market rose by ₹1,050 to ₹1.61 lakh per 10 grams, while silver surged by ₹6,000 to ₹2.62 lakh per kg, supported by safe-haven demand amid geopolitical tensions.
Analysts said the bullion market remains caught between conflicting forces. While geopolitical risks and a softer rupee are supporting prices, elevated oil prices and inflation concerns are strengthening expectations of a prolonged high-rate environment.
Outlook
In the near term, bullion prices are likely to remain range-bound, with the Federal Reserve’s policy guidance acting as the key trigger. A continued rise in crude oil prices and escalation in geopolitical tensions could support gold as a hedge against uncertainty. However, any indication of delayed rate cuts or sustained inflation may cap gains, keeping both gold and silver volatile within a broad range.
–With Reuters inputs