Gold Price Plunge! Profit-Booking Hits Metal After Near 3-Week High - What Investors Need to Know Now!

Gold prices experienced a slip on Wednesday, a day after reaching a near three-week high. This decline was primarily attributed to a rebound in the US dollar and profit-booking by investors. Earlier, a strong rally in gold was fueled by expectations that the US Federal Reserve might begin cutting interest rates as early as next month. In India, the price of 24-karat gold was ₹12,551 per gram, 22-karat gold at ₹11,505, and 18-karat gold at ₹9,413, according to the India Bullion & Jewellers Association. Globally, spot gold fell 0.5% to $4,107.41 per ounce. Experts noted that the dollar index recovering made bullion less attractive. Despite the dip, gold remains above the $4,100 an ounce mark. Traders are pricing in a high probability of a Fed rate cut in December, and comments from Fed Governor Stephen Miran hinted at a possible 50-bps cut. Non-yielding gold generally benefits from low interest rates and economic uncertainty. Steady investor interest and the ongoing wedding season are supporting domestic gold prices. While short-term corrections might occur, analysts expect gold to be supported by expectations of monetary easing and steady physical demand in India.

Impact: This news directly influences the Indian commodity market. Lower gold prices can affect the profitability of gold miners and jewelry manufacturers if they have significant inventory. For consumers, it might offer a slight relief, especially during the ongoing wedding and festive season, potentially boosting sales for jewelers. The fluctuations also provide trading opportunities for commodity investors. The news is relevant for Indian investors tracking global economic indicators and central bank policies, as gold is often seen as a safe-haven asset and its price is sensitive to interest rate expectations. Rating: 6/10.

Difficult terms: Profit-booking: Selling an asset after its price has risen to secure the profit made. US dollar index: A measure of the value of the US dollar relative to a basket of foreign currencies. Federal Reserve (Fed): The central banking system of the United States, responsible for monetary policy. Interest rates: The cost of borrowing money or the return on lending money. Basis point (bps): A unit of measure used in finance to describe the percentage change in a financial instrument or market rate. One basis point is equal to 0.01% (1/100th of a percentage point). Monetary easing: Policies undertaken by central banks to lower interest rates and increase the money supply, aiming to stimulate economic activity. Safe-haven asset: An investment that is expected to retain or increase its value during times of market turbulence or economic downturn. Bullion: Gold or silver in bulk form, usually in bars or ingots.