Gold prices in the morning trade on the MCX in the futures market were quoting with losses of over Rs. 250 at Rs.48878 per 10gm. Silver in line also retreated lower by a similar proportion to Rs. 66250 per kg.
The loss is on the back of strengthening in the dollar index and as the much awaited US coronavirus relief stimulus is still to be doled out. Nonetheless, the losses are capped as the Democrats in the US Senate said they will go ahead on the President Biden's $1.9 trillion package without the support of Republican if necessary.
Further there is US Federal Reserve's policy decision that is due to be announced later today, which resulted in position squaring by investors. "ETF outflows also show lack of investor interest. However, supporting price is rising virus cases and drop in bond yields and rise in Chinese imports last month," said Ravindra Rao, VP- Head Commodity Research at Kotak Securities. The US Fed is expected to continue with its loose monetary policy stance and Fed Chair Jerome Powell will be watched out for hints on the state of the economy.
Spot gold was down by 0.2 per cent to $1,846.42 per ounce by 0349 GMT. US gold futures eased 0.3 per cent to $1,845.30. "Gold appears to be in a holding pattern as investors are waiting for the Fed," said Jeffrey Halley, a senior market analyst at OANDA.