Gold, Silver Prices Fall Up To 2% On Hawkish Fed Signals Ahead Of Festive Buying

Gold and silver prices declined by up to 2% on Friday as hawkish signals from the US Federal Reserve strengthened expectations of higher interest rates for longer. Silver recorded steeper losses, falling more than Rs 4,000 per kg on the Multi Commodity Exchange (MCX).

Gold futures for December delivery fell 0.63%, or Rs 911, to an intraday low of Rs 1,41,685 per 10 grams. At around 12.20 PM, gold traded at Rs 1,41,800, down Rs 796 or 0.56% from its previous close.

Silver futures dropped Rs 4,282, or 2.26%, to touch an intraday low of Rs 1,85,171 per kg. The metal later traded at Rs 1,85,500, down Rs 3,953 or nearly 2%.

The decline comes ahead of Dhanteras and Diwali, when demand for precious metals typically rises, offering some relief to festive buyers.

In international markets, spot gold fell 0.7% to around $3,991 per ounce, while spot silver declined 1.6% to $51.27 per ounce.

Market experts attributed the losses to the Federal Reserve’s hawkish stance. The US central bank kept interest rates unchanged at 3.75-4% in a 10-2 vote, while policymakers continued to express concerns over elevated inflation. Two members reportedly favoured a rate hike.

Fed Chair Kevin Warsh said inflation remained stubbornly high. Strong economic indicators released after the policy announcement further strengthened expectations that borrowing costs could remain elevated.

Commodity experts said gold was approaching a key support range of Rs 1.40 lakh-Rs 1.41 lakh per 10 grams. A decisive break below this level could push prices towards Rs 1.37 lakh-Rs 1.38 lakh. Silver’s next major support lies between Rs 1.83 lakh and Rs 1.85 lakh per kg.

Despite the correction, analysts said current levels could attract long-term investors and festive buyers. However, prices will depend on the Fed’s policy outlook, the US dollar, Treasury yields and crude oil movements.

Crude oil remains in focus amid rising geopolitical tensions in West Asia, developments involving Iran and concerns over possible supply disruptions.

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