Gold Prices Volatile on Fed Comments and Global Tensions; Silver Holds Steadier

Gold prices were volatile on Friday, reversing some of the previous session's gains as traders reacted to mixed economic signals. Federal Reserve Chair Jerome Powell's comments significantly dampened expectations of an interest rate cut in December, leading to a climb in the dollar index to a three-month high, which pressured gold. Spot gold traded around $4,004 per ounce. Despite this pullback, gold remains on course for its third straight monthly gain, bolstered by consistent buying from central banks, notably Kazakhstan and Brazil, which collectively purchased 220 tonnes in the third quarter.

December gold futures in India were trading just under Rs 1.21 lakh per 10 grams, while December silver futures hovered slightly above Rs 1.48 lakh per kilogram. Rahul Kalantri of Mehta Equities noted that initial weakness was a direct reaction to Powell's hawkish tone, but metals recovered. He identified support for gold at $3,970–$3,940 and resistance at $4,045–$4,075. For silver, support was seen at $48.60–$48.25 and resistance at $49.55–$50.00.

In the domestic Indian market, gold finds buyers near Rs 1,20,880–1,21,470 and faces selling pressure around Rs 1,21,990–1,22,500. Silver is expected to trade between Rs 1,46,750–1,47,450 on the downside and Rs 1,49,740–1,50,880 on the upside.

Jateen Trivedi of LKP Securities mentioned that the Fed's rate cut was already priced in, failing to spark significant bullish sentiment. Geopolitical tensions, including hints from US President Trump about resuming nuclear testing, have kept global investors nervous, supporting bullion as a safe-haven asset. Trivedi expects gold to trade between Rs 1,18,000 and Rs 1,24,500 in the near term.

Silver's steadier performance is attributed to its dual role as a precious metal and an industrial commodity used in electronics and renewable energy. This industrial demand provides a floor, cushioning its price during uncertain periods.

Impact: This news significantly impacts Indian commodity traders and investors. Fluctuations in global gold and silver prices directly affect domestic markets, consumer purchasing power for jewelry, and investment portfolios. Global economic sentiment and geopolitical stability also influence overall market risk appetite, making this information crucial for financial decision-making. Rating: 7/10.

Difficult Terms: * **Volatile**: Prices moving up and down rapidly and unpredictably. * **Short-covering**: When traders who bet on price decreases buy back the asset to limit potential losses. * **Industrial demand**: The need for a commodity in manufacturing processes. * **Dollar index**: A measure of the US dollar's strength against a basket of major currencies. * **Rate cut**: A reduction in interest rates by a central bank. * **Hawkish comments**: Statements by central bank officials suggesting a preference for tighter monetary policy, often involving higher interest rates. * **Bullion**: Gold or silver in bars or ingots, not yet minted into coins. * **Geopolitical tensions**: Strains or conflicts between countries stemming from political and geographical factors. * **Risk meter**: An indicator of the perceived level of risk in financial markets. * **Safe-haven asset**: An investment that is expected to maintain or increase its value during periods of economic uncertainty or market turmoil. * **Support**: A price level where demand is strong enough to prevent further price declines. * **Resistance**: A price level where selling pressure is strong enough to prevent further price increases. * **Priced in**: When the expected impact of an event has already been reflected in current market prices.