MCX gold futures inch higher ahead of Fed’s interest rate decision

MCX precious metals were trading mixed while crude oil futures slipped in the red. Market participants around the world are anticipating the US Fed’s monetary policy decision later today. With inflation softening, the Fed’s decision will give more clarity to traders and investors.

Precious metals

Gold futures on the MCX were trading higher by 0.19% at ₹73,230 per 10 grams. After trading lower earlier in the session, the yellow metal climbed back into the green.

Meanwhile, silver futures on the MCX saw losses of 0.16% and were trading at ₹88,999 per kg. The metal had hit an intraday high of ₹89,088 and was off its day’s low of ₹88,372.

Base metals

Base metals were trading mixed on Wednesday with copper futures on the MCX trading higher by 0.25% at ₹810. Meanwhile, zinc futures were down with losses of 0.65% to trade at ₹267.20. Lead futures were trading higher by 0.82% at ₹184.45.

Crude oil and natural gas

MCX crude oil futures on Friday were trading lower by 1.80% at ₹5,880 per barrel. As a rate cut approaches, it is likely that the demand for crude oil might increase due to an increase in manufacturing and consumption. However, weak demand from China has put a cap on crude oil prices.

Natural gas futures on the MCX were down 0.5% on Wednesday and were trading at ₹195.4.

Economic data

Markets will be closely tracking the US Federal Reserve’s monetary policy decision on Wednesday. Favourable inflation figures and dovish statements by Jerome Powell have affirmed that the Fed will cut interest rates. However, with fears of a recession and economic slowdown, traders and investors will also be keeping an eye on the direction and magnitude of future rate cuts.

Although markets are expecting a 25 bps rate cut, it is possible that the Fed might cut interest rates by 50 bps.

Meanwhile, the United Kingdom reported its core CPI at 3.6% while India’s WPI inflation for August came in at 1.31%.