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Gold Recovers but Remains Range-Bound Ahead of Fed and ECB Decisions

Published on Jul 24, 2023 15:36

Gold futures recovered a bit after trading down over $5 an ounce in the early Asia trades today. The focus for this week remains on Fed and ECB rate decisions.

The dollar index has recovered sharply, up nearly 2% since hitting 15-month low of 99.22 against the basket of currencies. The recovery comes ahead of the Fed rate decision later this month in which it is widely expected to hike the rates, probably the last hike for the year.

International bullion futures were trading at $1966.90 up 30 cents. Sharp turnaround in dollar has brought the metal under selling pressure, bringing it down from $1989.9 hit in July 20. The levels to be watched on upside are $1990 and $1900 on the downside in long term.

MCX Gold for August delivery are trading down by RS 49 at Rs 59260 per 10 grams. The counter may find a resistance near Rs 59400 levels for the day and a break of Rs 60k is crucial for further upside in the metal.

The US Federal Reserve is expected to raise rates by 25 basis points on Wednesday, and Fed Chair Jerome Powell`s comments after the meeting will be closely watched for further insights. The European Central Bank is also anticipated to lift rates by a quarter-point on Thursday, while the Bank of Japan is likely to maintain its policy of ultra-low interest rates on Friday. Additionally, markets are awaiting the Fed-preferred PCE inflation gauge and Q2 GDP growth estimate for the US this week.

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