Gold, Silver Rise Up to 1% Ahead of US Fed Decision

Gold's Technical Setup

According to analysts, MCX gold opened with a mild gap-up but remained capped by its 50-day exponential moving average, a technical indicator often used to gauge medium-term trend strength. The contract recovered from the Rs 1,50,700-1,50,000 support zone, suggesting that this range has held as a meaningful floor for the metal in recent sessions. Immediate resistance for gold is seen at Rs 1,54,000-1,54,700, with a break above that zone potentially opening the way toward Rs 1,56,300-1,57,000. On the downside, support is placed at Rs 1,50,700-1,50,000, followed by a further support zone at Rs 1,48,000-1,47,300.

Silver's Technical Levels

MCX silver also opened higher, trading near Rs 2,35,000 after recovering from the Rs 2,30,000 zone. Resistance is seen at Rs 2,39,000-2,40,000, followed by Rs 2,45,000-2,46,000, while support is placed at Rs 2,34,000-2,33,000 and Rs 2,30,000-2,29,000, giving traders a fairly clear technical framework for gauging the metal's next move depending on how these levels are tested in the coming sessions.

International Gold Prices Also Rise

In the international market, US gold futures for December delivery rose about 1 per cent to $4,380 per ounce, a move broadly consistent with the domestic price action seen on the MCX, reflecting a synchronised global rally in gold prices rather than one driven purely by domestic factors.

What's Driving the Rally

The buying in gold was supported by a decline in crude oil prices, which in turn eased pressure on the US dollar and Treasury yields. Lower bond yields typically make non-yielding assets like gold relatively more attractive to investors, since the opportunity cost of holding gold instead of interest-bearing instruments diminishes when yields fall.

The Fed Decision Looming Large

Adding to the anticipation, the Federal Reserve is widely expected to raise interest rates by 25 basis points, according to experts. While a rate hike might typically be expected to weigh on gold prices given the metal's inverse relationship with yields, the fact that this move is already largely anticipated by markets means its actual announcement is unlikely to be the primary swing factor; instead, the central bank's accompanying guidance on future policy direction is likely to carry more weight for how bullion prices move in the sessions following the decision.

Geopolitical Tensions Adding to Uncertainty

Beyond the immediate monetary policy backdrop, geopolitical tensions also remained a key factor influencing bullion prices. The unresolved US-Iran conflict continues to weigh on market sentiment, while reports of a Houthi drone being intercepted by Saudi Arabia and explosions reported on Iran's Qeshm Island added further to the prevailing sense of geopolitical uncertainty. Such tensions typically reinforce gold and silver's traditional role as safe-haven assets, with investors often turning to precious metals during periods of heightened geopolitical risk, a dynamic that appears to be compounding the price support already coming from softer yields and easing crude oil prices.