After attaining lifetime highs in the past month, gold prices seem to be on a decline amid dampened investor sentiment on account of US Federal Reserve hinting at possibly no other rate cut this year.
The yellow metal prices plunged by ₹1,200 to ₹1,24,100 per 10 grams in the national capital on Tuesday amid weak global cues.
The precious metal of 99.5 per cent purity declined by ₹1,200 to ₹1,23,500 per 10 grams (inclusive of all taxes), extending its losses for the second straight session. It had settled at ₹1,24,700 per 10 grams on Monday.
In the local bullion market, gold of 99.9 per cent purity had finished at ₹1,25,300 per 10 grams in the previous market session.
“Gold fell on Tuesday, pressured by a strong US dollar and hawkish remarks from several Federal Reserve officials, who dismissed the possibility of another interest rate cut next month,” Saumil Gandhi, Senior Analyst - Commodities at HDFC Securities, said.
Silver also fell sharply by ₹2,500 to ₹1,51,500 per kilogram (inclusive of all taxes) on Tuesday from the previous close of ₹1,54,000 per kg on Monday.
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The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.12 per cent to 99.99, to a three-month high, which also put downward pressure on precious metals.
In the overseas markets, spot gold slipped by USD 7.84, or 0.2 per cent to USD 3,993.65 an ounce while silver was trading nearly 1 per cent lower at USD 47.73 per ounce.
After last week’s Federal Reserve monetary policy meeting, Fed Governor Lisa Cook, along with Mary Daly and Austan Goolsbee, highlighted labour market concerns but refrained from committing to another cut in December.
“Market attention now shifts to upcoming ADP employment and ISM PMI data, while easing safe-haven demand and China’s withdrawal of gold tax incentives may weigh on sentiment,” Kaynat Chainwala, AVP Commodity Research, Kotak Securities, said.
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