Gold and silver rise before Fed rate decision

In overseas trade, December gold futures rose about 1% to $4,380 an ounce, underlining that the move was not limited to domestic contracts. Lower bond yields have improved the near-term case for gold by reducing the opportunity cost of holding it, while weaker crude prices have eased pressure on inflation expectations and, by extension, on Treasury yields and the dollar.

That leaves the Fed meeting as the main catalyst. Investors are broadly expecting a 25-basis-point rate increase, a backdrop that normally weighs on precious metals if it pushes real yields higher. But markets are also watching for any signal that the tightening cycle is nearing its peak, which would be constructive for bullion even if the central bank delivers another hike.

The price action suggests traders are positioning for a policy statement that is less important for the size of the move than for the tone of the guidance. If the Fed sounds more concerned about inflation persistence, gold could struggle to extend gains despite safe-haven demand. If it reinforces a slower pace of hikes or hints at a pause later, bullion may have room to build on Wednesday’s rebound.

Technical levels also matter. MCX gold recovered from the 150,700-150,000 rupee support zone but remained capped by its 50-day exponential moving average, with resistance seen at 154,000-154,700 rupees. Silver has been firmer, rebounding from the 230,000 rupee area and testing the 235,000 rupee region, with 239,000-240,000 rupees the next resistance band.

Geopolitics added a second layer of support. Unresolved US-Iran tensions, reports of a Houthi drone intercepted by Saudi Arabia and explosions on Iran’s Qeshm Island kept a bid under safe-haven assets, even as the macro backdrop remained dominated by rates.

For investors, the key question is whether Wednesday’s gains are the start of a trend or a pause before another leg lower in metals if the Fed keeps the policy stance restrictive. The answer will likely hinge on whether yields and the dollar continue to drift down after the meeting, and whether bullion can hold above nearby chart support rather than simply reacting to headline risk.