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Gold prices fell in India to near 3-month lows ahead of monthly US inflation data, which analysts say could have some impact on Federal Reserve's monetary policy stance. The US inflation reading is due at 6 pm later in the day. On MCX, gold futures were down 0.3% to 50,421 per gram while silver fell 0.5% to 60,310 per kg. Gold has come under pressure since price came closer to 56,000 in early March as the dollar rallied while US Treasury yields also advanced, curbing investors’ enthusiasm for the safe haven metal.

The US Fed last week raised its benchmark overnight lending rate by half a percentage point but many economists are debating whether it has fallen so far behind in its monetary tightening.

Gold is seen as a hedge against inflation and a safe store of value during times of political and economic crises, but is highly sensitive to rising short-term U.S. interest rates, which raise the opportunity cost of holding zero-yield bullion.

In international markets, spot gold today fell to a 3-month low ahead of the crucial US inflation data. Spot gold was down 0.3% at $1,832.06 per ounce as the dollar index hovered near 20-year highs. A strong dollar makes greenback-priced bullion less attractive for other currency holders.

Among other precious metals, spot silver dipped 0.1% to $21.23 per ounce, while platinum edged higher 0.1% to $964.64, and palladium fell 1.2% to $2,040.25.

“Gold and silver prices continued to deteriorate despite some relief seen in the US dollar and US bond yields. On Tuesday, gold and silver rallied a bit in the morning session but couldn't hold on to their gains and slipped to close below the importance support levels of $1840 for gold and $21.30 in case of silver. Gold and silver prices crashed on Tuesday after the U.S. Federal Reserve member said aggressive interest rate hikes could be undertaken to control inflation," said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.

“The dollar was choppy on Tuesday, fluctuating between modest gains as traders were getting ready for Wednesday's US Consumer Price Index data, which could provide hint on the likely path of the Federal Reserve's monetary policy. Investors have been in a risk-on mood, as the yield on the benchmark US 10-year note eased back below the 3% psychological level and from the highest levels since 2018 at 3.20% scored on Monday."

“Gold has support at $1822-1810, while resistance is at $1850-1862. Silver has support at $21.10-20.80, while resistance is at $21.58-21.70. In rupee terms gold has support at 50,330–50,110, while resistance is at 50,880–51,050, while silver has support at 60,140-59,750, and resistance is at 61,150–61,510," he added.

(With Agency Inputs)

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