Gold prices edged lower today in India after posting strong gains in the previous two session. On MCX, August gold futures fell 0.1% to ₹52,540 per 10 gram. Silver futures on MCX advanced 0.18% to ₹65,123 per kg. In the previous session, gold had surged over 1% or ₹550, extending Monday's ₹1,000 gain. Also, in the previous session, silver prices surged to ₹67,560 at day's high but profit-taking at higher levels pushed it lower and the while metal had settled 0.4% lower.
In global markets, spot gold was little changed at $1,957.84 per ounce. Prices of gold hit an all-time of $1,980.57 in the previous session before retreating after investors booked profits and the dollar regained some ground. Among other precious metals, silver dropped 1.1% to $24.31 per ounce while palladium slipped 1.1% to $2,259.52.
Gold traders are now looking ahead to the US Fed's two-day policy meeting, which ends later today.
Worries over the impact of rising coronavirus cases on global economy and expectations of possible inflation from more stimulus measures supported gold.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion. Gold is also seen as a hedge against inflation.
Data on Tuesday showed that US consumer confidence fell more than expected in July.
The US dollar has rebounded after hitting a two-year low on Tuesday against a basket of currencies. But "gains in US Dollar may however be capped amid political wrangling over the next US fiscal rescue package. However in case of gold safe haven demand may continue to lend support," Kotak Securities said in a note.
Investment demand of gold remained strong. The holdings SPDR Gold Trust, the world's largest gold-backed exchange-traded fund or gold ETF, said its holdings rose 0.7% to 1,243.12 tonnes.
Meanwhile, US lawmakers were far from reaching an agreement on a new package to support the world's leading economy. With only 100 days to go before the US presidential election, talks are tense between Democrats and Republicans in the US Congress. (With Agency Inputs)