Gold and silver prices fell in domestic futures trading on Tuesday, influenced by a stronger dollar and a reduction in trade tensions between the US and China, which undermined the precious metals’ safe-haven appeal.
On the Multi Commodity Exchange (MCX), gold futures for December delivery dropped by ₹836, or 0.69%, settling at ₹1,20,573 per 10 grams on a business turnover of 13,332 lots. Similarly, silver futures for December delivery decreased by ₹1,558, or 1.05%, to ₹1,46,200 per kilogram, with a trading volume of 20,939 lots.
The dollar index, which measures the greenback’s strength against a basket of six major currencies, increased by 0.08% to stand at 99.95.
Internationally, Comex gold futures experienced a decline due to the robust dollar and fading expectations for a further interest rate cut by the US Federal Reserve in the upcoming month. The December gold futures slipped by $19.19, or 0.48%, to $3,994.81 per ounce. Comex silver futures for December delivery fell by 0.62% to $47.75 per ounce, marking a third consecutive day of losses in overseas trading.
“Gold remained around the $4,000 per ounce level as the dollar stayed strong, reaching three-month highs, while lower chances of an interest rate cut in December by the Fed and easing US-China trade tensions reduced gold’s demand,” stated Manav Modi, Analyst – Precious Metal Research, at Motilal Oswal Financial Services Ltd.
In a related context, Fed policymakers expressed differing opinions on the US economy on Monday, a discussion anticipated to escalate leading up to the central bank’s December meeting. The ongoing federal government shutdown has resulted in the absence of key macroeconomic data from the Bureau of Labor Statistics, complicating market expectations, Modi noted.
Jigar Trivedi, Senior Research Analyst at Reliance Securities, added, “Investors are looking forward to US private payroll data due this week for further insights into the Fed’s interest rate trajectory. Concurrently, safe-haven demand for gold has diminished following a US-China agreement last week to extend the tariff truce, ease export restrictions, and lower trade barriers.”
Analysts anticipate that bullion prices will remain under pressure in the short term as traders assess the implications of a strong dollar, reducing geopolitical risks, and mixed signals from the US economy ahead of significant data releases.
