Gold prices in the international market experienced a modest increase on Friday, bolstered by a declining dollar, although the gains were tempered by the hawkish remarks from U.S. Federal Reserve officials. In line with the global trend, MCX gold futures commenced at Rs 1,27,022, reflecting an increase of Rs 271 (0.21%), whereas silver futures began at Rs 1,63,025, marking a rise of Rs 555 (0.34%) in the initial trading session. The yellow metal demonstrated significant appreciation, increasing by Rs 5,955 per 10 grams this week to date. Silver demonstrated notable resilience, increasing by Rs 15,300/kg during the same timeframe.
Gold prices experienced a modest increase on Friday, buoyed by a declining U.S. dollar, positioning them for a weekly gain. Nonetheless, the upward momentum was constrained by recent hawkish statements from U.S. Federal Reserve officials, which moderated expectations regarding a potential rate cut in December. As of 0200, spot gold exhibited an increase of 0.4%, priced at $4,188.93 per ounce, whereas U.S. gold futures for December delivery maintained a stable position at $4,191.90 per ounce.
For the week thus far, bullion has increased by 4.8%, supported by a weaker dollar. The dollar index appeared set to register its second consecutive weekly decline, thereby increasing gold’s attractiveness for investors denominated in alternative currencies. Concerns regarding inflation and indications of resilience within the U.S. labor market, subsequent to two rate cuts this year, have prompted numerous Federal Reserve policymakers to embrace a prudent approach towards additional easing. In the previous month, the Federal Reserve reduced interest rates by 25 basis points; however, Fed Chair Jerome Powell expressed caution regarding additional cuts, referencing the constraints posed by limited data availability.
Reports indicates that traders are currently assigning a 51% probability to a quarter-point rate cut next month, a decrease from the 64% observed in the prior session. Gold, which does not yield interest, generally exhibits strong performance in environments characterized by low interest rates and during times of economic uncertainty. In the interim, the resumption of operations within the U.S. government following an unprecedented 43-day shutdown alleviated certain investor apprehensions and reinstated the dissemination of economic data. Today, the US Dollar Index was hovering near the 99.16 mark, falling 0.02%.