Gold Price Today, August 20: Gold prices ticked lower but remained in a narrow range on Thursday (August 20), as some strength in the US dollar weighed on the yellow metal.
As of 6:00 am IST, spot gold was down 0.3 per cent, or USD 11, at USD 4,511 per ounce. The precious metal traded in a narrow USD 19 range during Thursday’s session so far. Meanwhile, spot silver was largely unchanged at USD 67.04 per ounce.
The slight decline in gold prices came after the yellow metal climbed above USD 4,500 in the previous session, after trading around USD 4,350 earlier on Wednesday. The sharp move higher followed a surprise announcement by the US Treasury to increase liquidity support for longer-dated US government bonds, which pushed bond yields and the dollar lower.
Gold prices rose to their highest level since June 4 in the previous session.
Yields on 30-year US Treasuries fell sharply on Wednesday from around their highest level in 19 years after the US Treasury Department said it would double the size of its liquidity-support buyback operations for longer-dated bonds, Reuters reported.
Gold Price Today: MCX Gold, Silver Price
In the domestic market, gold and silver futures were not trading at the time of writing. On Wednesday, gold and silver futures on the Multi Commodity Exchange (MCX) settled at Rs 1,58,078 per 10 grams and Rs 2,36,780 per kg, respectively.
Gold Price Today: US Dollar, Fed Rate Hike Outlook
Gold prices faced some pressure in Thursday’s session as the US dollar regained some ground. The US dollar index, which measures the greenback against a basket of six major currencies, was trading at 98.81.
A stronger US dollar typically weighs on gold prices because it makes the dollar-denominated metal more expensive for holders of other currencies.
Meanwhile, minutes from the US Federal Reserve’s July 28-29 meeting showed that several officials were prepared to raise interest rates at the meeting, while many said further hikes could be required if inflation fails to return to the central bank’s 2 per cent target.
Markets will now turn their attention to the September FOMC meeting. According to the CME FedWatch Tool, markets are pricing in around a 32 per cent probability of a rate hike at the September meeting.
However, despite relatively subdued expectations for a September rate hike, analysts continue to see the possibility of at least one Fed rate hike in 2026.
Rate hikes are generally negative for gold because higher interest rates increase the attractiveness of interest-bearing assets, while potentially supporting the US dollar. Both factors can reduce demand for non-yielding gold.
