Gold prices ease in future trade as traders await US Federal Reserve's policy decision

New Delhi: Gold prices fell Rs 148 to Rs 1,09,222 per 10 grams in the domestic futures market on Monday, mirroring a weak global trend as market participants stayed cautious ahead of the US Federal Reserve's policy decision.

On the Multi Commodity Exchange (MCX), the most-traded October futures fell Rs 148 or 0.14 per cent to Rs 1,09,222 per 10 grams in a turnover of 15,852 lots. The December contract also moved lower, shedding Rs 111 or 0.10 per cent to Rs 1,10,323 per 10 grams in 5,656 lots.

"Gold hovered around Rs 1,09,000 per 10 grams, as investors awaited a crucial US Federal Reserve (Fed) policy decision meeting later this week.

"Traders are pricing in a 25 basis points reduction at the Fed's upcoming meeting amid signs of labour market weakness, with some expecting that easing could extend into next year," said Jigar Trivedi, Senior Research Analyst at Reliance Securities.

Silver, however, traded higher. The December contract rose Rs 121 or 0.09 per cent to Rs 1,28,959 per kilogram in 18,528 lots, while the March next year delivery edged up Rs 41 or 0.03 per cent to Rs 1,30,311 per kilogram in 1,072 lots.

In the global markets, Comex gold futures for December delivery dipped by 0.10 per cent to USD 3,682.72 per ounce. Silver futures for December delivery also depreciated by 0.25 per cent to USD 42.72 per ounce.

Trivedi added that ahead of the Fed's announcement, investors will monitor key macroeconomic indicators such as US retail sales and industrial production, which could provide further clues on the strength of the American economy and the scope for additional interest rate cuts.

"Meanwhile, the US administration on Sunday renewed its request to a federal appeals court to fire Fed Governor Lisa Cook, raising concerns about the central bank's independence. At the same time, the US-China negotiations underway in Madrid since Sunday are being watched closely," he said.

Market participants expect gold to remain range-bound in the near term as traders prefer to wait for the Fed’s signals before taking fresh positions, Trivedi added.