On Tuesday, gold prices were observed trading beneath the significant $4,000/ounce threshold, following a decline to their lowest point in two weeks during the prior trading session. This downturn was influenced by diminished safe-haven demand, attributed to indications of alleviating US-China trade tensions and the market’s expectations regarding the US Federal Reserve’s forthcoming policy decision. In international markets, gold December futures settled at $4,019.70 per troy ounce, reflecting a decline of 2.85%, while silver concluded at $46.774, marking a decrease of 3.73%. The decline represented a violation of critical support levels for both metals, with analysts linking the weakness to a combination of geopolitical optimism and the unwinding of long positions by traders. In the interim, the domestic commodity exchange, MCX, encountered yet another technical malfunction today, resulting in an extended interruption of trading operations.
In the earlier session, Gold December futures on the Multi Commodity Exchange settled at Rs 1,20,957 per 10 grams, reflecting a decline of 2.02%, while silver futures experienced a drop of 2.78%, settling at Rs 1,43,367 per kilogram. “Gold prices have fallen below 4000 and Silver 47 as bullion’s appeal as a safe-haven was somewhat diminished with indications of an easing of US-China trade tensions, and market players await this week’s Federal Reserve interest rate decision,” said Renisha Chainani. Chainani observed that economic officials from the United States and China are currently negotiating the terms of a trade agreement, which is anticipated to be concluded later this week in a meeting between President Donald Trump and President Xi Jinping.
“If Trump and Xi have a fruitful trade summit this week, gold may find itself somewhat in the dark.” She added “If the Fed adopts a dovish stance with this week’s anticipated rate decrease, however, this might be countered.” Manoj Kumar Jain noted that gold and silver are facing challenges due to “huge long unwinding by traders and investors ahead of the Fed monetary policy meetings.” He observed that expectations of a dovish Federal Reserve and a weaker dollar may bolster prices at reduced levels.
“Gold slipped below the $4,000 mark during intraday trading in the Comex division but is holding these levels on a closing basis.” Gold is currently maintaining its critical threshold of $3,870, while silver is sustaining its support level of $46.50 per troy ounce in the global markets,” Jain stated.