Indian Gold Futures Decline on Fed Uncertainty and Trade Truce Hopes, Global Prices Rise

Gold prices experienced a dip in domestic futures trading on Friday. On the Multi Commodity Exchange (MCX), gold futures for December delivery saw a decrease of Rs 218, or 0.18%, closing at Rs 1,21,290 per 10 grams. This movement was attributed to investor caution stemming from the U.S. Federal Reserve's signals regarding interest rate cuts and the perceived temporary truce in trade relations between the U.S. and China.

In contrast, global markets showed a different trend, with gold prices on Comex trading slightly higher. December gold futures on Comex were priced at $4,020.67 per ounce, while silver futures saw a slight decline of 0.37% to $48.43 per ounce.

Jigar Trivedi, a Senior Research Analyst at Reliance Securities, commented that gold was trading around USD 4,020 per ounce, heading for its second consecutive weekly loss. He cited fading expectations of Federal Reserve rate cuts and a potential U.S.-China trade deal as key pressures.

The article also provided city-wise retail prices for gold, indicating variations across major Indian cities.

Impact This news has a moderate impact on commodity investors and those tracking inflation hedges, as gold prices are sensitive to monetary policy and geopolitical stability. The divergence between domestic futures and global spot prices might create trading opportunities or signal market sentiment shifts. The overall impact on the Indian stock market is indirect, primarily affecting investor sentiment towards cyclical assets and safe-haven commodities. Rating: 3

Difficult Terms MCX (Multi Commodity Exchange): A leading commodity derivatives exchange in India where futures contracts for various commodities, including gold, are traded. Comex: A prominent commodity futures exchange based in New York, part of the CME Group, where precious metals like gold and silver are traded. Federal Reserve (Fed): The central bank of the United States, responsible for monetary policy, including setting interest rates. Rate cuts: Decisions by central banks to lower their benchmark interest rates, which can stimulate economic activity but also potentially lead to inflation. Yellow metal: A common colloquial term for gold, known for its luster and value. Futures trade: A standardized contract to buy or sell a specific commodity or financial instrument at a predetermined price on a specified future date. Ounce: A unit of weight commonly used for precious metals, approximately equal to 28.35 grams. Grams: A standard metric unit of mass. K (Karat): A measure of gold purity. 24K signifies pure gold (99.9%), while lower karats indicate alloys with other metals.