Gold prices retreated from peak levels and traded Rs 1,300 lower at Rs 1,13,800 per 10 grams in the national capital on Wednesday, as investors rushed to book profits ahead of the US Federal Reserve's policy decision.
According to the All India Sarafa Association, gold of 99.5 per cent purity declined by Rs 1,300 to Rs 1,13,300 per 10 grams (inclusive of all taxes) on Wednesday.
On Tuesday, the precious metal of 99.9 per cent and 99.5 per cent purity had jumped Rs 1,800 each to touch a lifetime high of Rs 1,15,100 and Rs 1,14,600 per 10 grams, respectively, in the Delhi bullion market.
"Gold traded weak on profit booking ahead of the crucial Fed policy decision, as participants trimmed risk before the outcome. The sentiment remains cautious, with markets awaiting not just the rate cut but also the Fed's forward guidance on further easing.
"Any neutral stance or less dovish comments without a clear roadmap for additional rate cuts could trigger a couple of percentage points of downside in bullion," said Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.
Silver too gave up gains and drifted lower, with profit-taking weighing on sentiment.
The white metal slumped Rs 1,670 to Rs 1,31,200 per kilogram (inclusive of all taxes) on Wednesday. In the previous session, it had scaled a new record of Rs 1,32,870 per kg, after rising Rs 570.
Globally, gold and silver also witnessed a pullback after hitting fresh peaks, as investors stayed cautious ahead of the Federal Open Market Committee's (FOMC) policy announcement later in the day.
Spot gold slipped nearly 1 per cent to USD 3,664.82 per ounce after scaling an all-time high of USD 3,703.23 per ounce on Tuesday.
"Spot gold eased slightly to USD 3,664 per ounce as the dollar attempted a recovery from near its lowest level in three years ahead of the highly anticipated Federal Open Market Committee rate decision.
"Investor attention now turns to Federal Reserve (Fed) Chair Jerome Powell's post-decision press conference and the updated dot plot, with markets seeking guidance on the Fed's policy path through the remainder of 2025," said Kaynat Chainwala, AVP Commodity Research, Kotak Securities.
Praveen Singh, Head of Commodities and Currencies at Mirae Asset Sharekhan, said, "The US Fed is expected to slash the benchmark rate by 25 basis points, but Fed governors such as Stephen Miran and Michelle Bowman may dissent to pave the way for aggressive interest rate cuts later." Silver too dropped by nearly 3 per cent to USD 41.38 per ounce.
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