Gold Price Hovers at Caution as Markets Digest Rate Hike and US-China Talks

The gold price has entered the week with a cautious undertone as markets digest the Federal Reserve's recent rate hike. The Fed raised its benchmark rate by 25 basis points to 3.75%, 4.00%, with Chair Kevin Warsh reiterating policymakers' commitment to returning inflation towards the 2% target.

According to Manav Modi, Senior Analyst at Motilal Oswal Financial Services Ltd., gold has been hovering in a narrow range of Rs 150,000-155,000 since the past few weeks. The recent rebound from the Rs 148,000-150,000 region shows buying interest at lower levels, although the failure to sustain above Rs 160,000 suggests that upside momentum has moderated.

The Bollinger Bands analysis indicates that the 20-day average is placed at Rs 154,235, while the upper band stands at Rs 160,266 and the lower band at Rs 148,205. Gold is currently just below the middle band, making Rs 154,200-155,000 the immediate hurdle.