Gold prices continued to slide for the second straight week, pressured by a stronger dollar, easing geopolitical tensions, and the US Federal Reserve’s cautious signals on rate cuts that dented demand for safe-haven assets.On the Multi Commodity Exchange (MCX), gold futures for December delivery fell Rs 2,219, or 1.8 per cent, over the week. The yellow metal hit an intra-day low of Rs 1,17,628 per 10 grams on October 28, marking a sharp reversal after nine weeks of gains, PTI reported.
Analysts said global and domestic gold markets witnessed a steep correction earlier in the week as investors booked profits following recent highs.“Heavy profit-booking pushed global gold down from recent highs to test the $4,000-an-ounce level. Domestic gold mirrored this, falling below Rs 1,19,000 per 10 grams before stabilising and recovering modestly in the latter half of the week,” said Sneha Jain, Investment Manager on Smallcase and Founder and CEO of WealthTrust Capital Services.She added that MCX gold futures showed high volatility, dropping from above Rs 1,23,000 to nearly Rs 1,18,000 per 10 grams before rebounding to around Rs 1,21,500.The dollar’s strength also weighed on bullion. “The US dollar index surged after the Fed’s comments, making dollar-priced gold more expensive for foreign buyers and triggering selling. Rising bond yields earlier in the week also made non-yielding bullion less attractive,” Jain said.In international trade, Comex gold futures for December delivery fell $141.3, or 3.41 per cent, during the week to settle at $3,996.5 per ounce on Friday. The drop came after gold briefly touched fresh highs in early October before profit-taking set in.The rupee traded with a mild weakening bias against the US dollar, which slightly cushioned the fall in domestic gold prices.Sandip Raichura, CEO of Retail Broking & Distribution and Director at PL Capital, said the week’s developments were largely negative for gold. “Tensions between Russia and Ukraine eased, Trump-Xi talks were positive, the Fed remained hawkish on rates, and India’s festival buying season ended. All these factors were gold-negative in the short term,” he said.Silver prices showed resilience after two weeks of turbulence. On the MCX, silver futures for December delivery rose Rs 817, or 0.55 per cent, ending their losing streak.“Silver futures experienced a larger crash, falling from near Rs 1,55,000 per kg to test Rs 1,45,000 before regaining some ground,” said Jain of WealthTrust Capital Services.On Comex, silver futures remained largely flat, closing the week at $48.16 per ounce.N S Ramaswamy, Head of Commodities & CRM at Ventura, said remarks from Fed Chair Jerome Powell cooled the metals rally by signalling that future rate cuts would depend on macroeconomic data.“After hitting new peaks, a natural correction phase and profit taking has occurred. But long-term structural drivers — including shifts in monetary policy, spiralling US debt, central bank buying, persistent inflation, and geopolitical risks — remain bullish,” Ramaswamy said.Analysts believe sustained central bank accumulation could push gold toward record highs in the coming months. “Western sanctions have reinforced central banks’ desire to diversify away from the dollar. Ballooning federal debt, fiscal deficits, and the ongoing government shutdown have further strengthened gold’s safe-haven appeal,” Ramaswamy added.
