COMEX Gold futures saw mixed movement in thin trades today as the markets focused on the FOMC meeting. The FOMC is expected to confirm market expectations that the Federal Reserve (Fed) will remain on hold for the rest of the year, according to a latest update from the World Gold Council (WGC). This will likely influence gold’s performance. The WGC noted that historical analysis showed that when the Fed has shifted from a tightening to a neutral stance, gold prices have increased, even if this effect has not always been immediate. The combination of rangebound US interest rates, a slowdown in the appreciation of the US dollar and continued market risks will continue to make gold attractive to investors.

The WGC believes that the 20 March FOMC meeting, which will include the Fed’s projections report, will provide more clarity about their monetary policy expectations which, in turn, will offer further guidance about gold’s performance this year. Current bond prices reflected by the market, which tend to accurately include interim cues from the Fed, are signaling that the Fed will most likely be on hold during 2019 – and has a chance of a cut (15%) for the first time in several years.

The US dollar is under pressure ahead of the FOMC meet. The dollar index tested three week low near 95.70 yesterday and currently quotes flat at 95.86. COMEX Gold currently trades flat at $1306 per ounce. MCX Gold futures are trading at Rs 31816 per 10 grams, down 0.45% on the day as the slide under Rs 32K stayed in place. The counter tested a low of Rs 31725 per 10 grams before witnessing a recovery.

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