Gold prices today: Gold prices edged higher on Wednesday amid a weak dollar and sharp decline in crude oil prices, ahead of an expected US Federal Reserve rate hike later in the day and Thursday's European Central Bank meeting.

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The June gold futures were trading at Rs 60,744 per 10 grams on the MCX at 5.20 pm, up by Rs 116 or 0.19 percent from Tuesday's closing price. Meanwhile, the May Silver futures were trading at Rs 74,733 per kg and were lower by Rs 312 or 0.42 percent.

"A consensus rate hike of 25 basis point is priced in by the markets, a lot depends on the Fed Outlook about the US economy, inflation and its guidance on interest rate hikes in its meeting that is scheduled for later today. A pause in the interest rate hike would lead gold rallying to life time highs and staying there, confusing signals from the Fed would lead to some sell off and profit booking. We remain bullish on gold for the longer term and would be buying gold at every dip with an investment timeframe of two years," said Rahul Agarwal, Director Wealth Discovery/EZ Wealth.

"We are at the last leg of Fed rate hikes and then we have rate cut cycle due to global recession. Historically, whenever the rate cuts have happened in US, the dollar index has gone through a bear cycle. And in this bear cycle, gold does well as it has negative correlation with US dollar. Accordingly, gold is expected to continue doing well in coming months," said Dr Mukesh Jindal, Co-Founder of Alpha Capital.

International markets

In the international markets, both gold and silver were trading higher at $2,015 per ounce and $25.34 per ounce, respectively.

Spot gold was flat at $2,016.28 per ounce by 0852 GMT after rising more than 1 percent on Tuesday. It was trading in a narrow $7.01 range.

US gold futures rose 0.1 percent to $2,025.10.

“Spot gold prices in the Delhi markets traded at Rs 60,750 per 10 grams, up Rs 670 per 10 grams,” said Saumil Gandhi, Senior Analyst of commodities at HDFC Securities.

“Comex gold held steady above the key $2,000-level in Asian trading hours on Wednesday as investors turned their attention to the US Federal Reserve’s interest rate decision due later in the day,” Sriram Iyer, Senior Research Analyst at Reliance Securities, said.

The US Federal Reserve’s rate decision is expected at 11:30 pm IST, with the likelihood of a 25-basis-point rate hike pegged at 86 percent.

The Fed rate hike in May is broadly priced in and Indian market will possibly not react much unless there is a big surprise from the US central bank.

The Fed is also expected to signal a pause in its 14-month tightening cycle, as policymakers balance the need to slow inflation against risks ranging from bank failures to the possibility of a US debt default as soon as next month.