Mumbai: Gold prices slipped this week as 24-carat gold fell by ₹670 per 10 grams. A stronger US dollar weighed on investor sentiment. Moreover, fading hopes of another Federal Reserve rate cut added pressure to the market. Consequently, traders stayed cautious, watching global economic cues for signs of stability.
The price of 10 grams of 24-carat gold closed the week at ₹1,20,100, dropping from ₹1,20,770 last week, according to the India Bullion and Jewellers Association (IBJA). Gold prices faced pressure as international bullion hovered near $4,000 for the week, weighed down by the stronger dollar and shifting rate expectations.
Meanwhile, comments from US Federal Reserve Chair Jerome Powell added to the pressure. Although the Fed announced a second 25-basis-point cut this year, Powell’s hawkish tone reduced hopes for further easing. Consequently, market expectations for another rate cut in December slipped from about 90 per cent to nearly 60 per cent.
Furthermore, the dollar index remained firm around 100, while the USD/INR moved toward 89. Analysts noted that the record-long US government shutdown delayed official data, forcing investors to rely more on private surveys. Moreover, both ISM manufacturing and services PMIs fell below 50, signalling contraction, even as private payrolls rose by 42,000.
In addition, trade tensions between the US and China eased slightly. US President Donald Trump and Chinese President Xi Jinping agreed on tariff trimming in exchange for fentanyl curbs, renewed soybean purchases, and continued rare-earth exports, which softened safe-haven demand.
However, China’s decision to cut VAT exemptions for gold retailers from 13 per cent to 6 per cent dampened physical demand. Banks also paused new retail gold accounts in response.
Looking ahead, Fed liquidity support worth about $29.4 billion and the end of quantitative tightening highlight persistent funding stress. Additionally, the US added uranium, copper, and silver to its critical minerals list, boosting long-term metal demand.
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