Gold’s luster diminished on Thursday following the U.S. Federal Reserve’s moderation of expectations regarding additional rate cuts in 2025. Following a recent surge beyond Rs 1.21 lakh, prices have moderated in the subsequent sessions. On Thursday, gold futures decreased by Rs 1,671, opening at Rs 1,18,995 per 10 grams. The Federal Reserve’s measured approach, coupled with the impending trade discussions between the United States and China, suggests that volatility is expected to persist. Fed Chair Jerome Powell cautioned that further rate cuts were not guaranteed, highlighting the disruptions in economic data caused by the government shutdown and the significant divisions among the 19 Fed policymakers. Meanwhile, silver December futures also opened lower, declining by Rs 1,444, or 1%, to Rs 1,44,637 per kilogram.
On the international stage, gold prices experienced a modest increase on Thursday, buoyed by a minor retreat in the U.S. dollar and the anticipated 25-basis-point rate reduction by the Federal Reserve. Spot gold increased by 0.4% to $3,942.97 per ounce as of 0050, whereas U.S. gold futures for December delivery decreased by 1.1% to $3,955 per ounce. On Wednesday, both gold and silver concluded the day with gains in domestic and international markets. Gold December futures concluded at Rs 1,20,666 per 10 grams, reflecting an increase of 0.85%, whereas silver December futures finished at Rs 1,46,081 per kilogram, marking a rise of 1.20%.
“Gold and silver gained in early trade and briefly crossed $4,000 and $48 per troy ounce, respectively, but came off day’s highs after the Fed Chairman’s hawkish comments on December rate cuts,” stated Manoj Kumar Jain. The Federal Reserve reduced interest rates by 25 basis points to 4.0% during its policy meeting that concluded on Wednesday. Nonetheless, Fed Chair Jerome Powell indicated ambiguity regarding an additional rate cut prior to the year’s conclusion, prompting profit-taking in gold and silver in the context of optimism surrounding a possible U.S.–China trade agreement. Jain observed that gold is presently sustaining its crucial support level of $3,870 per ounce, whereas silver is upholding support at $46.50 per ounce on a closing basis.
The U.S. Dollar Index was hovering near 99.02, reflecting a decline of 0.20 points or 0.20%. Gold and silver prices are anticipated to exhibit volatility this week, influenced by variations in the dollar index, the European Central Bank’s policy meeting, and the forthcoming US-China presidential discussions. Gold is anticipated to fluctuate within the range of $3,870-4,280 per troy ounce, whereas silver is projected to oscillate between $45.50–51.50 per ounce,” Jain added. Gold’s allure diminishes as the Federal Reserve curtails expectations for rate cuts in 2025; prices decline by Rs 1,700 per 10 gm.