Gold Prices Fall Over 1% This Week As US Inflation Strengthens Rate Hike Expectations

Gold prices recorded a weekly decline of 1.36 per cent as stronger-than-expected US inflation figures and a stable dollar reinforced expectations that the US Federal Reserve could raise interest rates later this year.

On Friday, MCX Gold June futures slipped 0.59 per cent, while MCX Silver May futures declined 0.94 per cent. Gold futures currently trade near Rs 1,56,000, while silver futures stand around Rs 2,67,000 per kilogram.

IBJA data showed 24-carat gold slipped to Rs 1,56,463 per 10 grams on Friday from Rs 1,58,622 at the week’s start.

The US dollar remained firm during the period, with the dollar index rising approximately 0.10 per cent.

US Personal Consumption Expenditures (PCE) inflation increased 3.8 per cent year-on-year in April, marking the fastest pace since May 2023.

The inflation reading strengthened market expectations of additional monetary tightening by the Federal Reserve.

Market analysts noted that gold and silver continue to attract selective safe-haven demand and value-based buying near important technical levels.

Traders remain focused on US interest rate expectations, Treasury yields, and the direction of the dollar.

Rising energy prices have also added to inflationary pressures. This development has increased the possibility of further policy tightening, reducing the attractiveness of non-yielding assets such as gold.

Recent Federal Reserve meeting minutes revealed that more policymakers are now willing to consider additional rate hikes if inflation remains elevated.

In international markets, COMEX gold continues to trade within the $4,570-$4,600 range.

Analysts described the current price action as a consolidation phase marked by cautious investor sentiment.

Traders see immediate COMEX gold resistance at $4,600-$4,650, while $4,400-$4,350 remains a key support zone.

For MCX Gold, resistance is placed between Rs 1,60,000 and Rs 1,62,000. The Rs 1,54,000-Rs 1,52,000 range continues to provide strong support for domestic prices.

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