Gold Loses Sheen As It Hits 4-Month Low Of Rs 29,400

Comex Gold

Gold traded within a range on Wednesday after hitting the lowest in almost five months in the previous session, with investors in a holding pattern ahead of the outcome of a two-day meeting of the US Federal Reserve. Investors and analysts have said they will be paying close attention to the central bank's outlook for 2018, as some have said projections for fewer rate increases next year or statements indicating a cautious approach could buoy gold prices.

However, the dollar and US yields fell on Wednesday after data showed sluggish growth in consumer prices, contradicting signs that inflation may be firming and suggesting that the Fed may raise rates more slowly next year.

Gold is sensitive to rising USA interest rates, as these increase the opportunity cost of holding non-yielding bullion and boost the dollar, in which it is priced. On Tuesday it touched $1,235.92, the lowest since July 20.

USA gold futures were up 0.3 per cent at $1,245.40.

Comex Gold
Daily February Comex Gold

Traders said tepid demand from local jewellers and retailers at domestic spot market, mainly kept pressure on gold prices but a slightly better trend in global markets capped the fall. "Any further strength in the dollar index would push the gold price lower", said Naeem Aslam, London-based chief market analyst at Think Markets.

Platinum was up 0.3 percent at $887.40 an ounce, while palladium was 0.1 percent lower at $1,008.90 an ounce.The platinum discount to palladium widened to around $120 last week, the steepest since April 2001. "Depending on how hawkish the wording is, gold could drift lower still, as charts do not show any meaningful support at least until $1,205-$1,210", Meir said.Gold is sensitive to rising US interest rates, as these increase the opportunity cost of holding non-yielding bullion and boost the dollar, in which it is priced.

Among other metals, March silver declined by 0.7% to $15.67 an ounce, after losing around 3.5% last week.

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