Gold Prices Ease Ahead of Key US Economic Report
Gold price in India today slipped slightly on Thursday as the US dollar firmed and traders awaited key US inflation data that could influence the Federal Reserve’s upcoming rate decisions. Despite the minor dip, gold remains near historic highs following weeks of volatility and record-breaking rallies.
According to Reuters, spot gold edged down 0.3% to around $3,975 per ounce, while domestic gold prices in India hovered near ₹1,18,800 per 10 grams, tracking global movements. Silver price also saw a mild decline, trading around ₹1,37,200 per kilogram on the Multi Commodity Exchange (MCX).
The dip comes after a dramatic rally earlier this month that saw gold prices climb past $4,100 per ounce, fueled by investor demand for safe-haven assets amid ongoing geopolitical tensions and global market uncertainty.
“The market is in a holding pattern,” said one commodities analyst. “Traders are waiting to see whether US inflation numbers will justify another rate cut, which could set the next direction for gold prices.”
Strong Dollar Weighs on Gold
The US dollar index gained 0.2% on Thursday, making gold more expensive for holders of other currencies. As a result, the gold price in India today reflected this global sentiment, with local jewellers reporting lighter demand ahead of the upcoming festive season.
A stronger dollar and rising Treasury yields tend to pressure gold prices since they make the non-yielding metal less attractive compared to interest-bearing assets. However, analysts note that any sign of easing inflation could quickly reverse this trend.
“If inflation comes in lower than expected, we might see the Fed take a more dovish stance,” said Rajesh Mehta, a bullion trader based in Mumbai. “That would push the dollar lower and send gold prices in India soaring again.”
Silver Price Also Softens
Alongside gold, silver prices edged lower as industrial demand softened amid cautious investor sentiment. On the MCX, silver futures slipped 0.5%, extending a two-day decline. Despite this, analysts say silver remains supported by strong fundamentals, especially from renewable energy and electronics sectors that rely on industrial silver usage.
Silver’s performance often mirrors gold, though it tends to be more volatile. Traders expect prices to stay in a narrow range until there’s clarity on the Fed’s next policy move.
India’s Festive Gold Demand Under Watch
India, the world’s second-largest consumer of gold, is entering its peak festive and wedding season, typically a strong demand period for the precious metal. However, with gold prices hovering near all-time highs, retail demand has been mixed.
Local jewellers report that many buyers are opting for lighter jewellery or gold coins instead of heavier investment pieces, hoping for price corrections before Diwali.
“Retail demand is resilient but cautious,” said Mehul Shah of the Indian Bullion and Jewellers Association. “Consumers are adjusting to higher gold prices, while some are waiting for a dip to make purchases.”
Gold Prices Remain Supported by Global Uncertainty
Despite the recent pullback, gold prices are still up more than 45% year-to-date, supported by central bank purchases, geopolitical instability, and expectations of a global economic slowdown.
Economists believe the metal will continue to find support as long as inflation remains above the Fed’s 2% target and interest rate cuts stay on the table.
Meanwhile, the silver price could benefit from the ongoing expansion of solar energy projects in India and globally, which has driven up industrial demand for the metal.
Outlook: Gold Still in Bullish Territory
Market watchers expect gold prices in India to remain volatile over the next few weeks as investors digest inflation data, central bank moves, and ongoing currency fluctuations.
“Gold may test ₹1.20 lakh again before the year ends,” predicted commodity strategist Ankit Jain. “If the dollar weakens and the Fed signals a rate cut in November, the rally could resume.”
In short, while gold price in India today saw a minor dip due to a stronger dollar, the long-term outlook for gold and silver remains bullish as safe-haven demand stays firm amid uncertain global economic conditions.
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