Gold prices experienced a decline in early trading on Tuesday, 18 November, as expectations for a US interest rate cut diminished. Investors are now looking forward to the release of postponed US economic reports scheduled for this week. The absence of US data in recent weeks, alongside the hawkish statements from various Fed officials, has reduced expectations for a rate cut in December. On the Multi Commodity Exchange, gold futures for December delivery declined by Rs 1,462 or 1.2%, currently trading at Rs 1,21,466 per 10 grams. Silver futures experienced a decline, falling by Rs 2,562 or 1.65% to reach Rs 1,52,750 per kilogram.
On Monday, Fed Vice Chair Philip Jefferson observed that the downside risks to employment have increased in comparison to the upside risks to inflation, yet he indicated that the Fed ought to advance “slowly” with any additional rate reductions. Ongoing concerns regarding inflation and indications of resilience in the US labor market—despite two rate cuts this year—have led numerous Federal Reserve officials to adopt a cautious stance towards additional monetary easing. In the international market, gold prices experienced a notable decline, dropping over 1% as a stronger dollar and diminishing expectations of a US rate cut next month negatively impacted sentiment. Market participants remained prudent in anticipation of postponed economic data set to be released later this week, which may provide new insights into the Federal Reserve’s forthcoming actions.
Spot gold experienced a decline of 1.5%, settling at $4,019.12 per ounce at 03:13, whereas US December gold futures concluded the session 0.5% lower at $4,074.5. In the realm of precious metals, spot silver experienced a decline of 1.2%, settling at $49.94 per ounce, while platinum saw a decrease of nearly 1%, priced at $1,526.45. Palladium also faced a slight downturn, down 0.4% to $1,379.02. The dollar index experienced a slight increase, resulting in higher costs for the metal for purchasers utilizing alternative currencies.
Gold, as a non-interest-bearing asset, generally attracts interest in low-rate environments and during times of economic distress. In the interim, the resumption of government operations in the United States following an unprecedented 43-day shutdown alleviated certain investor anxieties and reinstated the regular dissemination of economic data.