Gold prices declined on Wednesday, falling by Rs 900 from their peak of Rs 1,14,179 as officials from the US Federal Reserve moderated expectations regarding imminent rate cuts. Despite the recent pullback, the yellow metal has increased by Rs 9,600 month-to-date, sustaining bullish sentiment in the face of global uncertainty. Gold October futures prices were observed at Rs 1,13,400 per 10 grams, reflecting a decrease of Rs 436 or 0.38% around 9:10 am. Silver December futures prices reflected the prevailing sentiment, opening lower by Rs 312 or 0.23% at Rs 1,34,750/kg. The prices of the white metal have experienced a notable increase of Rs 12,877 in the current month to date.
In the international market, gold prices declined on Wednesday as investors realized profits following a record high in the previous session, while markets assessed US Federal Reserve Chair Jerome Powell’s cautious comments regarding potential interest rate cuts. Spot gold decreased by 0.3% to $3,753.22 per ounce, as of 0224. On Tuesday, gold and silver concluded on a positive note in both the domestic and international markets. Gold October futures contract concluded at Rs 1,13,836 per 10 grams, reflecting an increase of 1.43%, while the silver December futures contract closed at Rs 1,35,062 per kilogram, marking a rise of 1.13%. Gold and silver continued to rise, reaching new highs as the dollar index experienced profit-taking and demand for safe-haven assets increased. Gold prices reached an all-time high, and silver prices achieved a 14-and-a-half-year peak in international markets, with both precious metals establishing new record highs in domestic markets.
The dollar index experienced another decline, while the rupee fell to unprecedented lows against the US dollar, thereby bolstering the prices of gold and silver. Today, the US Dollar Index was positioned around the 97.35 level, reflecting an increase of 0.08 or 0.09%. “Robust global central bank buying, increasing ETF inflows and safe-haven buying are supporting gold and silver prices.” However, the Fed Chairman expresses concerns regarding inflation and the US job markets, and if the US Fed’s wait-and-see policy on further rate cuts persists, it may restrict the gains of precious metals,” stated Manoj Kumar Jain. Powell stated on Tuesday that the central bank must persist in balancing the conflicting risks of elevated inflation and a deteriorating job market in upcoming rate decisions, even as his colleagues presented arguments on both sides of the policy spectrum.
Market expectations indicate two additional 25-basis-point rate reductions this year, with a 93% likelihood in October and a 77% likelihood in December. “We anticipate that gold and silver prices will exhibit volatility this week, influenced by fluctuations in the dollar index, instability in global financial markets, and in anticipation of the US core PCE price index data.” Gold is anticipated to fluctuate between $3,654 and $3,840 per troy ounce, while silver is projected to range from $42.40 to $45.50 per troy ounce this week,” he added.