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Gold prices struggled near two-month lows in Indian markets amid flat global rates. On MCX, gold futures were down 0.11% to 47,637 per 10 gram while silver edged 0.15% lower to 61,018 per kg.  In global markets, gold rates were flat ahead of US inflation data due later today for rate clues. Spot gold today was little changed at $1,819.51 per ounce.

Gold had jumped over 1% in global markets in the previous session after less hawkish comments from the Federal Reserve chief on Tuesday sparked an upmove. Federal Reserve chief Jerome Powell said he was determined to rein in runaway inflation but pledged to maintain the healthy recovery in the world's top economy.

Gold is considered a hedge against higher inflation, but the metal is highly sensitive to rising US interest rates which increase the opportunity cost of holding non-yielding bullion.

The precious metal has been under pressure after minutes from the bank's December meeting revealed a hawkish tilt by officials spooked by months of stubbornly high price rises that many fear could hit consumers and ruin the growth rebound.

“COMEX gold trades little changed near $1820/oz after a 1.1% gain yesterday. Gold edged up as US bond yields and US dollar index came under pressure following Fed Chairman’s comments which were largely in line with expectations. Fed Chairman reiterated that the central bank may end bond buying and start interest rate hike this year. However, weighing on price is recovery in equity market and weaker investor interest as is evident from ETF flows," said said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.

“Gold continues to trade in the $1780-1830/oz range amid mixed factors and this trend may continue. However, Fed’s tightening expectations may keep pressure on prices," he added. 

Among other precious metals, spot silver shed 0.1% to $22.73 an ounce, platinum fell 0.4% to $967.43, and palladium was flat at $1,920.67.

Gold prices climbed 1% on Tuesday as the dollar slipped after U.S. Federal Reserve Chair Jerome Powell's testimony before Congress did not spring any surprises in terms of monetary tightening, while a retreat in bond yields also lent support. Focus now shifts to the U.S. core CPI data on Wednesday, which is expected to have risen by an annual 5.4% in December from 4.9% in the prior month. Technically market may trade flat in range of $1812-1826 before CPI data and breach of this range will fuel the rally that side, Further upside for bulls will come if breakout comes above yesterday high which is placed at $1824," said Vidit Garg, Director, MyGoldKart . (With Agency Inputs)

 

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