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Informist, Tuesday, Mar. 17, 2026

 

MUMBAI – The US Federal Reserve's monetary policy decision on Wednesday is unlikely to provide any new impetus for gold prices, according to Carsten Fritsch, commodity analyst at Commerzbank AG. Gold prices could rise if "the door remains open for interest rate cuts", however, the considerable uncertainty surrounding the duration of the West Asia conflict and the disruption to oil supplies are likely to make the Fed cautious about "making too clear a statement on the future interest rate path," Fritsch said in a report Tuesday.

 

"The gold price is struggling to fulfil its role as a safe haven in times of crisis," Fritsch said. Gold prices have fallen around 5% since the start of the war in Iran two and a half weeks ago. A significant rise in the dollar index has provided headwinds for gold prices. "However, there have also been periods in the recent past where the gold price has been able to defy a stronger US dollar. This is not the case this time due to the correction in expectations regarding Fed interest rate cuts," Fritsch added.

 

By the end of last week, Fed Funds futures were no longer pricing in even a 25-basis-point rate cut by the end of the year, he said. This is mainly because of a sharp rise in crude oil prices and the resulting inflationary risks. Investors in exchange-traded funds have also been pulling out money against this backdrop. Holdings in the gold ETFs tracked by Bloomberg have fallen by 37 tonnes in the last two weeks, effectively reversing all inflows since mid-January, he said.

 

At 1743 IST, the April futures of gold on COMEX were steady at $5,006.2 per ounce.  End

 

US$1 = INR 92.37

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Ashutosh Pati

Edited by Akul Nishant Akhoury

 

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