Gold Price Outlook: Can Bullish Trend Hold as Markets Await Fed Decision?

Gold prices eased slightly in early trade on Tuesday as investors waited for the US Federal Reserve’s upcoming interest rate decision. With the American labour market cooling and inflation still above the Fed’s 2% target, traders avoided aggressive positions ahead of Wednesday’s policy announcement.

At 11:30 am, gold on the MCX traded at Rs 1,29,320, down 0.49%, while silver slipped 0.55% to Rs 1,80,734. Analysts said the dip reflected mild profit-booking and rising caution after US 10-year bond yields rebounded.

Rahul Kalantri, VP – Commodities at Mehta Equities Ltd, said sentiment softened further after the US announced that the October–November Producer Price Index (PPI) data—expected this week—would now be released in January. “This delay adds uncertainty around inflation and the Fed’s stance,” he noted.

However, Kalantri highlighted that China’s continued gold purchases for the 13th consecutive month and tight global silver supply are likely to keep the downside limited. According to him, gold holds support at $4,165–4,135 globally and Rs 1,29,250–1,28,450 in India, with resistance seen at $4,230–4,265 and Rs 1,30,750–1,31,100, respectively.

Despite Tuesday’s decline, experts maintain that gold remains in a strong medium-term uptrend. Ponmudi R, CEO of Enrich Money, said the metal continues to trade with a “firm bullish bias,” supported by multi-month ascending price structures. Consistent buying near trendline supports underlines the ongoing formation of higher highs and higher lows.

He added that MCX Gold (February contract), currently trading near Rs 1,29,952, is benefitting from both global strength and domestic rupee weakness. The Rs 1,29,200 mark remains a crucial short-term support level, and holding above it could push prices towards Rs 1,30,000–1,31,000.

For now, traders expect gold and silver to remain range-bound until the Federal Reserve outlines its inflation outlook and future rate path. The Fed’s policy statement will be the key driver for precious metal prices in the coming days.