Rates of gold and silver crashed up to 2 per cent in the domestic futures market on Tuesday morning as fading hopes of a US Fed rate cut in December and easing concerns over US tariffs weighed on demand for safe-haven bullion. MCX Gold December futures were 1.19 per cent down at ₹1,21,466 per 10 grams, while MCX Silver December contracts were 1.65 per cent down at ₹1,52,750 per kg at 9:05 am.
International gold prices fell for a fourth consecutive session on Tuesday, amid a rise in the dollar and weakening prospects for a rate cut next month. The dollar index rose to 99.59, weighing on gold’s demand.
Since gold is backed in the US dollar, a stronger greenback makes the yellow metal more expensive in other currencies, affecting its demand.
The US shutdown, which ended after a record 43 days, had delayed the release of key macro data, creating uncertainty about the health of the world’s largest economy. Now with the shutdown over, the focus is on key US data releases this week, including the September nonfarm payrolls report on Thursday, as they will shape the expectations about the monetary policy path of the US Federal Reserve.
The central bank officials have been giving mixed signals about Fed policy.
Reuters reported that “Fed Vice Chair Philip Jefferson said on Monday the Fed needed to proceed slowly with further rate cuts, denting expectations for a decrease next month.”
“Gold and silver extended losses for the fourth straight session as expectations of a December US rate cut continued to diminish. With no major positive fundamental triggers in recent days, bulls remain hesitant—especially with both metals still trading at historically high levels,” said Rahul Kalantri, VP of commodities at Mehta Equities.
(This is a developing story. Please check back for fresh updates.)
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