Gold traded marginally lower on February 1, as traders and investors awaited the Budget announcement.
April 5 gold futures were trading at Rs 62,648 per ten grams lower by 0.14 percent on the MCX, after closing in the green during the previous session.
The interim budget may act as a catalyst for gold prices, noted Deveya Gaglani, research analyst - commodities, Axis Securities. “As the gems and jewelry industry expects an import duty cut from 15 percent to 5 percent, it may drag prices lower. We advise investors to be cautious and watchful ahead of the budget and avoid heavy positions for the day.”
As the FOMC signaled the end of the monetary policy hiking cycle, the not-so-hawkish signals from the FOMC statement improved the sentiments of precious metals.
However, Fed Chair Powell said it will be appropriate to start cutting rates at some point this year although he doesn't think a March cut is likely. The dollar rebounded after the comments and Treasury yields rose from recent lows.
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“Gold, often viewed as a hedge against inflation and economic uncertainties, faces challenges when interest rates rise, as it increases the opportunity cost of holding the non-yielding precious metal,” said Saish Sandeep Sawant Dessai, analyst, Angel One.
Jigar Trivedi, senior commodities analyst, at Reliance Securities, expected gold to trade towards the Rs 63,400 level, failing which, Rs 61,800 would act as support.
Over the past six months, gold prices have clocked a gain of around 3.33 percent on the MCX. In comparison, the equity benchmark index Nifty 50 has recorded gains of around 10 percent during the same period.
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