Gold, Silver Prices Fall as Strong Dollar and US-China Trade Truce Weigh on Safe-Haven Demand
New Delhi: Gold and silver prices declined in domestic futures trade on Tuesday as a firm US dollar and easing trade tensions between Washington and Beijing reduced demand for safe-haven assets.
On the Multi Commodity Exchange (MCX), gold futures for December delivery fell by Rs 836, or 0.69 per cent, to Rs 1,20,573 per 10 grams with a turnover of 13,332 lots. Similarly, silver futures for December delivery dropped by Rs 1,558, or 1.05 per cent, to Rs 1,46,200 per kilogram in 20,939 lots.
The dollar index, which measures the greenback’s strength against a basket of six major currencies, rose 0.08 per cent to 99.95, weighing on bullion prices.
In global markets, Comex gold futures for December delivery slipped USD 19.19, or 0.48 per cent, to USD 3,994.81 per ounce, as a stronger dollar and reduced expectations of another US Federal Reserve rate cut next month dampened investor sentiment. Comex silver futures also extended losses for the third consecutive session, trading 0.62 per cent lower at USD 47.75 per ounce.
“Gold hovered near the USD 4,000 level as the dollar stayed resilient at over three-month highs. The waning likelihood of another Fed rate cut in December and easing US-China trade tensions curbed bullion demand,” said Manav Modi, Analyst – Precious Metals Research, Motilal Oswal Financial Services Ltd.
Modi added that the debate among Fed policymakers over the US economic outlook is intensifying ahead of the December meeting. The lack of key macroeconomic data, including from the Bureau of Labor Statistics due to the ongoing federal government shutdown, has added to the market’s uncertainty.
Jigar Trivedi, Senior Research Analyst at Reliance Securities, said, “Investors are awaiting US private payroll data this week for further cues on the Fed’s policy outlook. Meanwhile, gold’s safe-haven appeal weakened after the US and China agreed to extend their tariff truce and ease trade barriers.”
Analysts said bullion prices are likely to stay under pressure in the near term as traders assess the impact of a firm dollar, easing geopolitical tensions, and mixed signals from the US economy ahead of key data releases.
