Gold Price Volatility Expected Ahead of Fed Policy Decision

The spotlight is on today's FOMC policy decision, which will set the tone for gold's next major move. According to Vedika Narvekar, Research Analyst - Commodities & Currencies at Anand Rathi Shares and Stock Brokers, both gold and silver prices are expected to be volatile this week ahead of the US Federal Reserve’s policy.

Gold ended last week with a modest gain of nearly 0.9%, but the recovery looked more like a technical bounce than a change in the underlying trend. The World Gold Council reported 18.1 tonnes of net ETF inflows for the week ended July 24, putting July on track to become the first month in three with positive inflows.

This week, gold has traded cautiously, slipping lower as markets avoided taking aggressive positions ahead of today's Federal Reserve policy decision. However, physical holdings have remained broadly stable near 4,000 tonnes, indicating that long-term buyers continue to accumulate at lower levels even as speculative demand has cooled.