Gold Drops Rs 3,000 as Traders Await Fed Decision
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- Gold fell $64.30 (1.3%) to around $4,997.40/oz on COMEX, with domestic prices dropping Rs 3,000 per 10 grams as traders positioned cautiously ahead of the Fed meeting starting tomorrow
- Federal Reserve is widely expected to hold rates as inflation fears intensify from spiraling energy prices tied to the US-Israel conflict in the Middle East, with Chair Jerome Powell's post-meeting press conference in focus
- Brent crude has surged 40% this year to around $106/barrel after the Strait of Hormuz remained shut for Israel, the US and their allies, amplifying inflation concerns globally
- Indian rupee touched a lifetime low of 92.47 against the US dollar, failing to lift sentiment for domestic gold buyers as import costs remained elevated
- LKP Securities' Jateen Trivedi said gold has entered a sideways corrective phase consolidating in the Rs 1,56,000–1,57,000 zone, noting that geopolitical tension drives safe-haven demand but rate expectations cap rallies
- Technical indicators flag weakening momentum — RSI at 47, flattening EMAs near Rs 1,56,000 — with immediate resistance at Rs 1,58,000 and strong support at Rs 1,54,000, prompting a 'sell on rise' recommendation
Why it matters: With Brent up 40% this year and the Fed widely expected to hold rates, gold is caught between competing forces: geopolitical safe-haven demand from Middle East conflict and rate-persistence pressure from energy-driven inflation. Indian buyers face compounded exposure because the rupee at a lifetime low of 92.47 makes MCX gold more volatile than COMEX — every dollar move is amplified on import costs, narrowing the cushion for domestic investors.
