Gold prices experienced a decline for the fourth consecutive day on Tuesday, influenced by a stronger US dollar and diminishing expectations of a forthcoming interest rate cut by the US Federal Reserve. This descent followed a broad sell-off last week triggered by optimistic remarks from Fed officials, which dampened hopes of immediate policy adjustments.
In India, the weakening trend was mirrored in gold and silver prices. As of Tuesday morning, the price of 24-karat gold was Rs 12,343 per gram and Rs 1,23,430 per 10 grams. The rates for 22-karat, 20-karat, and 18-karat gold were Rs 11,314, Rs 10,286, and Rs 9,257 per gram, respectively.
Silver prices also saw a decline, with Silver 999 fine trading at Rs 156 per gram and Rs 1,561 per 10 grams, while Silver 925 sterling stood at Rs 144 and Rs 1,444 per gram and 10 grams, respectively.
On the global front, spot gold dropped by 0.1% to $4,039.19 per ounce, and US gold futures for December delivery fell by 0.9% to $4,038.60. Meanwhile, spot silver decreased by 0.4% to $50 per ounce. Platinum saw a slight increase of 0.3% to $1,538.74, whereas palladium declined by 0.5% to $1,386.01.
The correction in prices was primarily attributed to the stronger dollar, making gold relatively more expensive for holders of other currencies. With the Federal Reserve indicating persistent inflation and potential delay in rate cuts, the appeal of non-interest-bearing assets like gold has diminished.
Experts believe that the market is currently in a phase of uncertainty, heavily influenced by expectations surrounding US interest rates. While recent setbacks are viewed as technical corrections rather than the end of a broader trend, the level of $4,150 is considered crucial for gold. Uncertainties surrounding the US economy, tariffs, and Federal Reserve decisions are expected to limit price fluctuations in the short term.
Silver, on the other hand, is displaying higher volatility, facing resistance levels and potential downward movements. However, there is also a possibility of an upward trend if prices surpass certain key levels.
In conclusion, experts suggest that gold’s future trajectory will heavily rely on incoming US data amidst global economic and geopolitical uncertainties. Caution is advised to investors, recommending selective buying during moderate price declines rather than chasing peaks.