On Tuesday, domestic futures trade observed a decline in gold prices, attributed to a robust dollar and a reduction in trade tensions between the US and China, which diminished the allure of the precious metal as a safe-haven asset. On the Multi Commodity Exchange, gold futures for December delivery declined by Rs 836, or 0.69 per cent, to Rs 1,20,573 per 10 grams, with a business turnover of 13,332 lots. Meanwhile, the dollar index, which measures the strength of the greenback against a basket of six currencies, increased by 0.08 percent to 99.95.
Globally, Comex gold futures experienced a decline, influenced by a strong dollar and waning expectations for an additional rate cut by the US Federal Reserve in the upcoming month. The yellow metal for December delivery declined by USD 19.19, representing a decrease of 0.48 per cent, settling at USD 3,994.81 per ounce. “Gold hovered around the USD 4,000 per ounce as the dollar remained resilient at over three-month highs, while reduced chances of another interest rate cut in December by the Federal Reserve, and easing US-China trade tensions blunted bullion’s demand,” Manav Modi said.
On Monday, Federal Reserve policymakers articulated divergent perspectives regarding the state of the US economy, a discussion poised to escalate as the central bank approaches its December meeting. The ongoing federal government shutdown has resulted in the absence of crucial macroeconomic data from the Bureau of Labor Statistics, which has further obscured market expectations, Modi noted.
Jigar Trivedi remarked that investors are anticipating the US private payroll data scheduled for release this week, seeking further insights into the Federal Reserve’s trajectory regarding interest rates. Concurrently, the demand for gold as a safe haven diminished following the recent agreement between the US and China to prolong the tariff truce, relax export restrictions, and reduce trade barriers. Analysts indicated that in the near term, bullion prices are expected to face pressure as traders assess the implications of a robust dollar, easing geopolitical risks, and mixed signals from the American economy prior to the important data release.