Gold Price Today: Gold prices edged higher on Wednesday, supported by weakness in the US dollar, after slipping in the previous session as elevated US Treasury yields weighed on the non-yielding asset.
As of 5:50 am IST, spot gold was trading 0.3 per cent higher, or up USD 10.60, at USD 4,345.20 per ounce. The yellow metal had declined in the previous session after briefly moving close to the USD 4,450 level.
Spot silver, meanwhile, remained under pressure and was down 0.5 per cent at around USD 63 per ounce.
MCX Gold, Silver prices
In the domestic market, gold and silver futures were not trading at the time of writing. On Tuesday, gold futures on the Multi Commodity Exchange (MCX) settled at Rs 1,54,281 per 10 grams, while silver futures settled at Rs 2,32,261 per kg.
Weaker US dollar supports gold prices
The US dollar provided some support to bullion prices in Wednesday’s session. The dollar index, which tracks the greenback against a basket of six major currencies, was down around 0.1 per cent at 99.62.
A weaker US dollar generally supports gold prices as the precious metal becomes cheaper for holders of other currencies, potentially boosting demand.
US bond yields cap upside
However, gains in gold remained limited by strength in US Treasury bonds and elevated yields amid rising uncertainty in the Middle East.
Higher bond yields typically weigh on gold because they increase the opportunity cost of holding the non-yielding asset, making yield-bearing investments relatively more attractive.
Crude oil prices fuel inflation concerns
Meanwhile, rising energy prices amid the conflict between the US and Iran have added to inflation concerns, with crude oil prices trading around USD 92 a barrel.
Higher crude prices can fuel inflation expectations and strengthen bets on tighter monetary policy or higher-for-longer interest rates. This can weigh on gold by increasing the appeal of interest-bearing assets.
FOMC minutes in focus
Market attention will now turn to the minutes of the Federal Open Market Committee meeting, due later on Wednesday. Investors will look for clues on the Federal Reserve’s monetary policy outlook and the likely trajectory of interest rates.
The tone of the minutes could influence the US dollar, Treasury yields and expectations for future rate cuts, with all three factors likely to remain important for gold prices in the near term.
