Gold Prices Dip As Dollar Strengthens; Traders Await US Data

The prices of precious metals declined in early trade on Friday, as gold and silver futures on the Multi-Commodity Exchange (MCX) tracked losses in the international market amid a stronger US dollar.

Gold futures opened 0.29 per cent lower at ₹1,21,148 per 10 grams, compared with Thursday’s close of ₹1,21,508. Silver futures also slipped 0.47 per cent to ₹1,48,140 per kilogram.

The initial weakness reflected cautious sentiment among traders ahead of crucial US economic data releases.

However, both metals witnessed a mild recovery later in the session.

Around 11:38 AM, the gold futures contract expiring on December 5 was trading marginally higher at ₹1,21,557 per 10 grams, up 0.04 per cent, while silver futures were trading flat at ₹1,48,747 per kilogram.

Analysts attributed the rebound to short-covering by investors following the early sell-off.

Global Market Trends

In the international market, spot gold fell 0.5 per cent to $4,004 per ounce in the morning session, weighed down by a stronger dollar and diminishing expectations of early rate cuts by the US Federal Reserve.

US gold futures for December delivery remained steady at $4,016.70 per ounce.

Despite the day’s decline, gold prices have gained nearly 3.9 per cent in October and remain on course for a third consecutive monthly rise.

The US dollar index, however, continued to hover near its three-month high, reducing the appeal of gold for investors holding other currencies.

A stronger dollar typically makes bullion more expensive for non-US buyers, thereby dampening demand.

In India, the broader stock market opened flat amid mixed global cues.

The Sensex began the day at 84,379.79, down 25 points from the previous close of 84,404.46, while the Nifty opened 14 points lower at 25,863.80.

Both indices, however, turned positive later, supported by buying in automobile and banking stocks.

Analysts said the subdued opening was partly influenced by uncertainty following the Trump-Xi summit.

“The Trump-Xi meeting resulted in only a one-year truce in the US-China trade war rather than a comprehensive deal. While investors welcomed the reduction in trade tensions, markets were disappointed by the lack of a definitive breakthrough,” they observed.

Outlook for Precious Metals

Market analysts expect gold prices to remain range-bound in the near term as investors await fresh cues from upcoming US economic indicators and Federal Reserve commentary.

“The strengthening dollar continues to exert downward pressure on gold and silver, but safe-haven demand may re-emerge if geopolitical or macroeconomic uncertainties intensify,” said a Mumbai-based commodities analyst.

Experts believe that although the near-term trend appears weak, global inflation concerns and sustained central bank buying continue to support the long-term fundamentals for precious metals.

Also Read: Indian Stock Market Opens Flat Over Mixed Global Cues