Here are 5 things to know about gold price jump today:
1) Traders said that domestic jewellers stepped up buying to meet festive season demand at the spot market, which fueled the uptrend in domestic prices.
2) Higher global prices of gold in overseas markets also supported domestic prices. Globally, gold edged up 0.1 per cent in range-bound trade to $1,313 an ounce as the dollar dipped. Investors remained cautious ahead of the outcome of a two-day Federal Reserve meeting in the United States.
3) The US Fed is expected to announce its balance sheet reduction plans and provide an outlook for interest rate hikes for the rest of the year. Higher interest rates lead to higher bond yields and dampen demand for non-interest yielding gold.
4) However, geopolitical tensions supported gold prices. US President Donald Trump escalated his standoff with North Korea over its nuclear challenge on Tuesday, threatening to "totally destroy" the country and mocking its leader, Kim Jong Un, as a "rocket man".
5) Geopolitical risks tend to boost demand for safe-haven assets such as gold and the Japanese yen. Donald Trump's comments overnight in regards to North Korea have certainly added a bid to the precious complex, but all in all very quiet ahead of the (Fed statement)," a Sydney-based trader said, adding that the dollar was providing some support. (With Agency Inputs)