Gold Prices Dip as US Federal Reserve Dampens Rate Cut Hopes

Gold prices saw a decline on Thursday, with MCX December gold futures slipping Rs 1,671 to open at Rs 1,18,995 per 10 grams, following recent highs above Rs 1.21 lakh. This price movement is largely attributed to signals from the US Federal Reserve that future interest rate cuts are not guaranteed. Fed Chair Jerome Powell expressed caution, citing disruptions in economic data due to the US government shutdown and divisions among policymakers. The prospect of fewer rate cuts can make holding gold less attractive for investors compared to interest-bearing assets. Silver prices also opened lower, with MCX December silver futures declining Rs 1,444. In the international market, spot gold saw a slight increase, supported by a weaker US dollar, even as US gold futures for December delivery fell. Analysts anticipate continued volatility in precious metals due to the Federal Reserve's guarded outlook and the upcoming US-China trade negotiations.

Impact This news directly impacts investors in gold and silver, leading to potential portfolio adjustments. It also affects jewellery businesses and industries that rely on precious metals, potentially influencing their costs and pricing strategies. The volatility can create trading opportunities but also introduces risk for those holding significant positions. Rating: 8/10

Difficult Terms: MCX: Multi Commodity Exchange of India, a commodity derivatives exchange. Federal Reserve: The central banking system of the United States. Rate Cuts: A reduction in a central bank's policy interest rate. Basis-point: A unit equal to 1/100th of a percentage point (0.01%). Spot gold: Gold available for immediate delivery and payment. Futures: A financial contract obligating the buyer to purchase, or the seller to sell, an asset (like gold) at a predetermined future date and price.