Gold and silver prices drop up to 1% on MCX due to profit booking ahead of US Fed policy decision

Gold and silver prices fell up to 1% in early deals on the MCX on Tuesday, 28 July, mirroring weak global cues. Precious metals witnessed profit-taking as the dollar index hovered near 101.5 ahead of the US Federal Reserve's monetary policy decision on 29 July.MCX gold August futures were 0.60% down at ₹1,42,200 per 10 grams, while MCX silver September contracts were 1.40% down at ₹2,18,076 per kg around 9:10 AM.In international markets, US gold prices traded lower as easing geopolitical tensions following the US and Iran's pause in retaliatory strikes reduced safe-haven demand.The focus is also on the US Federal Reserve policy decision on 29 July. The US central bank is widely expected to keep benchmark rates unchanged in the 3.50%-3.75% range.Traders will closely monitor Fed Chair Kevin Warsh’s comments, along with this week's US GDP and PCE inflation data, for fresh cues on the interest rate trajectory.Meanwhile, on the geopolitical front, de-escalation in the Middle East conflict dragged crude oil prices further lower.Brent crude fell more than 2% to trade near the $86 per barrel.Iran and the US halted their strikes on 26 July. US President Donald Trump said the US and Iran were engaged in discussions and suggested that a potential agreement could emerge.

However, Iran denied any direct negotiations with Washington."Gold is under pressure amid lingering concerns that the Federal Reserve could raise interest rates in July. Moreover, Trump's comments that the US was engaged in talks with Iran to end the Middle East conflict pushed oil prices lower and eased concerns over inflation, weighing on gold prices," Jigar Trivedi, Senior Research Analyst at IndusInd Securities, noted.(This is a developing story. Please check back for fresh updates.)Read all market-related news hereRead more stories by Nishant KumarDisclaimer: This article is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of individual analysts or broking firms, not Mint.

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