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Gold prices today slipped after a sharp selloff in the previous session. On MCX, gold futures were down 0.1% to 50,087 per 10 gram while silver fell 0.2% to 56719 per kg. Gold and silver prices fell sharply on Tuesday on the back of a strong US inflation data that also sent the dollar index and bond yields higher. In global markets, gold was flat today and traded near $1,704.03 per ounce.

“COMEX gold traded flat weighed down by recovery in the US dollar and higher bond yields in reaction to US inflation data. A slightly bigger than expected rise in consumer prices rekindled worries that the Fed may continue with aggressive rate hikes. The Fed is largely expected to raise interest rate by 0.75% in the coming week and market players now expect Fed to continue with aggressive hikes going ahead. Gold witnessed a sharp rebound which ran out of steam close to $1750/oz level and prices may remain under pressure as focus shifts to upcoming Fed meeting," said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.

The stronger-than-anticipated US inflation numbers have cemented the likelihood for a jumbo-sized rate hike at the (Fed meeting, scheduled next week. Gold is seen as a hedge against inflation, but higher interest rates increase the opportunity cost of holding it. The dollar index eased a bit today, making gold less expensive for overseas buyers.

Gold rates had prices in the previous session saw their biggest one-day percentage fall since July 14, as the dollar logged its best day since March 2020 after an unexpected rise in U.S. August consumer prices. In India, gold had dropped 500 per 10 gram on Tuesday. 

Gold Technical Outlook

Rahul Kalantri, VP Commodities, Mehta Equities Ltd, said: “Gold has support at $1696-1682, while resistance is at $1718-1726. Silver has support at $18.78-18.55, while resistance is at $19.28-19.45. In rupee terms gold has support at 49,940-49810, while resistance is at Rs50,380–50,540. Silver has support at Rs56,050-55,640, while resistance is at Rs57,180–57,610."

Meanwhile, in global equity markets, a semblance of calm returned after Tuesday's rout sparked by hotter-than-expected American inflation. Shares had their biggest drop in more than two years Tuesday, with the S&P 500 falling more than 4% and the Nasdaq 100 sliding more than 5%.

Today, US equity-index futures were higher while a gauge of the dollar retreated after jumping the most in three months on Tuesday. (With Agency Inputs)

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