Gold prices rose by Rs 700 to Rs 1.46 lakh per 10 grams in the national capital on Wednesday. This has come on the back of a fall in the rupee, while gold and silver prices were under pressure globally ahead of the US Federal Reserve’s policy decision. According to local traders, the price of 99.9 per cent pure gold rose by Rs 700 to Rs 1,46,500 per 10 grams (including all taxes). It closed at Rs 1,45,800 per 10 grams on Tuesday.

At the same time, silver prices remained stable at Rs 1.98 lakh per kg. The rupee depreciated by 21 paise against the US dollar to close at 95.28. The rupee came under pressure due to the strengthening of the dollar and the rise in crude oil prices. Traders said the depreciation in the rupee has boosted the cost of gold imports, which supported domestic prices despite weakness in international markets.

What do the experts say?

Saumil Gandhi, Senior Commodity Analyst at HDFC Securities said that gold and silver prices saw very little movement on Wednesday. Investors were waiting for the decision of the US Federal Reserve, which is a very important event for the precious metals market. In global markets, gold fell by $14.05 (0.35 percent) to $4,046.28 an ounce, while silver fell 1.23 percent to $53.75 an ounce. “Gold remained around $4,040 an ounce in foreign markets on Wednesday. Crude oil prices rose following an attack by Houthi rebels on Saudi Arabia’s Ras Tanura oil refinery,” said Praveen Singh, head of commodities at Mir Asset Sharekhan.

Can the price of gold fall?

According to Vedika Narvekar, Commodities and Currencies Research Analyst at Anand Rathi Share & Stock Brokers, investors are looking forward to the US Federal Open Market Committee (FOMC) decision due today. He said that while the Fed is widely expected to keep rates steady, market participants still fear a rate hike before the end of the year as inflation is driven by higher energy prices.

Narvekar said gold-backed exchange-traded funds (ETFs) — which had continued buying during the post-August decline — are now seeing outflows. Prices may fall further if central bank purchases do not increase significantly. He further said that on the demand front, Chinese households have taken advantage of the fall in prices to buy, while Indian buyers await the festive season, fearing that prices may fall further.