Gold Price Steady In India Ahead Of Key Fed Meet Lined Up This Week

Gold price in the retail market in India is stable for last two days. In Mumbai, 24K and 22K after remaining unchanged are quoting at Rs. 46,900 and Rs. 51,160 per 10 gm, respectively. Interestingly, even as there has been witnessed steep correction in gold overseas, with spot gold plunging almost over 6%, much hasn't changed for gold prices in domestic markets, thanks to the ailing rupee, which has now quickly breached 80 per dollar mark.

Crucial Fed meet outcome likely on July 27, 2022

As per the Fed meet calendar for the year, the crucial July Fed meet is lined up for July 26-27. So, the key announcement shall be notified in the late hours of July 27, 2022 likely. Pertinently, mostly 75 bps rate hike is betted upon as against an even aggressive rate hike move considering record high inflation, which is seeing no signs of abatement.

Gold faces challenges due to the upcoming rate hike

After breaking below $1700 per oz level, the yellow glistering metal has fast recovered the losses and last at the time of writing this copy at around 12:12 pm (IST) traded at $1725 per oz, with a minor cut internationally.

Though the greenback has yet again firmed up given the growth concerns and the upcoming Fed meet, analysts expect the greenback to be further strengthened. Marc Chandler, managing director at Bannockburn Global Forex, in a Kitco report said that while gold prices have room to move higher next week, the central bank's decision could limit gains. "Not only will the Fed most likely hike by 75 basis points, but it will also signal it is not done with the adjustment. I imagine gold will struggle near $1750 and the 20-day moving average is just above there [$1,752]," he said.

Furthermore, some other analysts view that as most of the hawkishness has been factored in there may not be seen much impact on the dollar and hence the bullion likewise.

Back on the MCX, mirroring international trend, gold August futures traded with a cut of 0.18% at Rs. 50,553 per 10 gm.