India Gold MCX February futures trades flat on Wednesday, following muted trend seen in the international spot prices as investors looked for clues on the pace of tapering by the US Federal Reserve at the end of a two-day policy meeting.

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The US central bank's two-day monetary policy meeting is set to end later in the day, with investors expecting the Fed to announce a faster wind-down of asset purchases, said a Reuters report.

On the Multi-Commodity Exchange (MCX), the February gold contracts were trading 0.13 per cent lower at Rs 48,010 per 10 grams at 0915 hours. The March Silver futures were trading 0.16 per cent lower at Rs 60,721 a kilogram.

Gold and silver plunged again amid expectations of interest rate hike from the US Federal Reserve after hotter than expected US PPI and core PPI data. Both the precious metals settled on a weaker note in the international markets.

Gold February futures contract settled at $1772.30 per troy ounce, and Silver March futures contract settled at $21.92 per troy ounce. Both the precious metals were also settled on a weaker note in the domestic markets.

Gold and silver plunged again on Tuesday after hotter than expected US inflation data. Normally, higher inflation supports precious metals prices but strength in the dollar index and anticipation of earlier rate hike by the US Federal Reserve in ongoing policy meetings triggered sell-off in both the precious metals, suggest experts.

“Higher than expected inflation data could prompt the US Federal Reserve to raise interest rates sooner than expected. We expect both the precious metals to remain volatile in today’s session ahead of the Federal Reserve meeting outcomes and gold is expected to hold key support of $1750 per troy ounce,” Manoj Kumar Jain, Director, Head-Commodity & Currency Research, Prithvifinmart Commodity Research, said.

Gold has support at $1758-1750 per troy ounce and resistance at $1784-1800 per troy ounce; silver has support at 21.70-21.44 per troy ounce and resistance at $22.20-22.55 per troy ounce.

“At MCX, Gold has a support at 47920-47780 and resistance at 48220-48380; silver has a support at 60300-60000 and resistance at 61200-61600 levels,” he said. Jain suggests buying gold around 48000 with a stop loss of 47780 for the target of 48350.

Technical Indicators:

Expert: Sriram Iyer, Senior Research Analyst at Reliance Securities

Domestic gold prices could start flat this Wednesday, tracking a flat start in the overseas prices.

Technically, if MCX Gold February sustains below 48100 level, it could witness a downside pressure up to 47900-47700 levels. Resistance zone is at 48150-48300 levels.

International spot silver prices have started flat this early Wednesday morning in Asian trade.

Technically, if LBMA Silver sustains below $21.00 levels, it could witness a Bearish momentum up to $21.20-$20.05 levels. Resistance zone is at $22.18-$23.00 levels.

Domestic silver prices could start flat this Wednesday morning, tracking a flat start in the overseas prices.

Technically, if MCX Silver March sustains below 61000 level, it could witness a Bearish momentum up to 60200-59800 levels. Resistance zone is at 62200-63100 levels.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)