Gold on MCX settled down -0.51% at 30263 as bond yields rose, supporting an advance in the dollar, lessening demand for the yellow metal as the FOMC meeting got underway, a day ahead of a widely expected interest rate hike. FOMC members are expected to vote to raise the Federal Reserve’s benchmark rate by 0.25% to range of 1.50% to 1.75%.
Current investor expectations are for three 0.25% rate hikes total 2018, which would leave the Fed’s benchmark rate at range of 2.00% to 2.25% by year-end. That could change on Wednesday, however, with the release of the FOMC’s Summary of Economy Projections which will include the closely watched “dot plots,” showing where each FOMC member in the meeting thinks that interest rates are heading at the end of the year for the next few years and in the longer run.
The recent statistics published by the GJEPC indicates significant jump in imports of gold bar during Feb ’18. The cumulative imports during the initial eleven-month period of the fiscal too have reported notable increase. According to GJEPC data, the country imported Rs 3,903.92 crores worth of gold bars in February 2018. Weaker demand in India prompted gold dealers to offer discounts for a second week straight, as a drop in local prices to 2-week lows and a festival failed to lure buyers.
Dealers in India were offering a discount of up to $3 an ounce over official domestic prices, unchanged from last week. The domestic price includes a 10 percent import tax. Since retail demand is weak, jewellers have also cut down purchases. They are maintaining lower-than-normal inventory. Technically now Gold is getting support at 30180 and below same could see a test of 30097 level, And resistance is now likely to be seen at 30351, a move above could see prices testing 30439.
Silver on MCX settled down -0.79% at 38216 as demand for the U.S. dollar strengthened ahead of the Federal Reserve’s policy meeting. U.S. lawmakers neared agreement on Tuesday on a massive government spending bill that Congress hopes to pass by Friday, as congressional leaders worked to narrow their differences on thorny issues such as President Donald Trump’s border wall.
The world’s financial leaders rejected protectionism on Tuesday and urged “further dialogue” on trade, but failed to diffuse the threat of a trade war days before U.S. metals tariffs take effect and Washington is to announce measures against China. British inflation was weaker than expected in February as the impact of the 2016 Brexit vote faded from the figures, easing some of the squeeze on consumers who have seen their pay rise more slowly than prices.
The Fed is widely expected to raise rates by a quarter point at the conclusion of its two-day policy meeting on Wednesday, but investors will mostly be focusing on any indications as to the pace of monetary policy tightening for the remainder of the year. Investors were still cautious however amid over the economic impact of U.S. protectionist policies.
The White House is expected to unveil up to $60 billion in new tariffs on Chinese imports by Friday, targeting technology, telecommunications and intellectual property. Technically market is under fresh selling as market has witnessed gain in open interest by 6.34% to settled at 23173 while prices down -304 rupees, now Silver is getting support at 38052 and below same could see a test of 37887 level, And resistance is now likely to be seen at 38431, a move above could see prices testing 38645.