MUMBAI: Gold prices were steady in early trade on Tuesday, as investors stayed cautious ahead of the US Federal Reserve’s interest rate decision.
On the Multi Commodity Exchange (MCX), gold February contracts were unchanged at Rs 1,29,978 per 10 grams during early trade.
"In the domestic market, MCX Gold (Feb) is trading near Rs 1,29,952, closely tracking the global uptrend while also receiving support from rupee weakness," market experts said.
"The Rs 1,29,200 region continues to act as a key short-term support. As long as this level holds, the path remains open toward the Rs 1,30,000–Rs 1,31,000 resistance zone," analysts stated.
Silver, however, moved higher, with MCX silver March futures rising 0.50 per cent to Rs 1,82,705 per kg.
The focus in global markets is now on the Federal Reserve, which will announce its policy decision on Wednesday (December 10).
The meeting comes at a time when the US job market is showing signs of cooling, even as inflation remains above the central bank’s 2 per cent target.
Recent data showed that the Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation measure, rose 0.3 per cent in September, matching the increase in August.
On an annual basis, the index climbed 2.8 per cent, slightly higher than the 2.7 per cent rise seen in the previous month.
Meanwhile, US private payroll data released last week indicated the sharpest decline in more than two and a half years, with private sector jobs falling by 32,000 in November.
At the same time, unemployment benefit claims dropped to 1,91,000 in the week ending November 29, the lowest level in more than three years and well below economists’ expectations of 2,20,000.
Economists at Comerica expect the Federal Open Market Committee to reduce the federal funds rate by 25 basis points, bringing it to a range between 3.50 per cent and 3.75 per cent in its final policy move of the year.
Although expectations of a rate cut generally support gold prices, the gains are being limited by higher bond yields.
The benchmark US 10-year Treasury yield climbed to a two-and-a-half-month high on Monday, adding pressure on the precious metal.