Gold and Silver Prices Slide as Dollar Strengthens; India’s Demand Remains Measured
Gold and silver prices fall amid a stronger US dollar;
India shows cautious but steady demand as investors weigh Fed policies
and global market trends.
Global gold and silver markets saw modest declines this week as the US dollar strengthened, though bullion in India continues to attract cautious buyers. Investors are weighing recent Federal Reserve actions alongside geopolitical and market developments.
Global Gold Retreats Amid Strong Dollar
Spot gold dipped 0.5% to $4,004 per ounce as of 0240 GMT, while US gold futures for December delivery remained near $4,016.70 per ounce. Despite this short-term fall, gold is on track for its third consecutive monthly gain, having risen nearly 3.9% in October.
Analysts attribute the decline to a stronger dollar, which makes gold more expensive for holders of other currencies, and growing uncertainty about future rate cuts by the US Federal Reserve.
Federal Reserve Influence and Market Reaction
Following the Fed’s quarter-point rate reduction on October 29—the second cut this year—the benchmark rate now stands at 3.75%–4.00%. However, Federal Reserve Chair Jerome Powell’s hawkish comments have tempered expectations for further easing, pushing markets to price a 74.8% probability of a December 25-basis-point cut, down from 91.1% a week ago.
Tim Waterer, Chief Market Analyst at KCM Trade, explained:
"The Fed chairman’s hawkish stance this week strengthened the dollar and complicated gold’s yield outlook, limiting upside potential in the near term."
Gold in India: Cautious but Steady
In the domestic market, prices remained relatively stable amid measured demand:
• 24-karat gold: ₹12,268 per gram
• 22-karat gold: ₹11,245 per gram
• 18-karat gold: ₹9,201 per gram
Aksha Kamboj, Vice President of the India Bullion & Jewellers Association (IBJA), noted:
"Gold is currently undergoing a minor correction, not a major downtrend. Indian buyers are becoming more price-sensitive after recent volatility."
Meanwhile, the SPDR Gold Trust, the world’s largest gold-backed ETF, recorded a 0.42% increase in holdings to 1,040.35 tons, signaling continued institutional interest.
Silver Prices Edge Lower
Silver prices also softened, trading around ₹1.46 lakh per kg, as post-festive demand tapered. Kamboj added that both manufacturers and investors remain cautious, and with stable supply, prices are unlikely to surge in the short term.
Colin Shah, Managing Director of Kama Jewelry, emphasized the mixed impact:
"While a softer dollar could boost global buying, high import costs and elevated domestic prices will temper Indian investor activity."
Outlook
Overall, the bullion market is balancing opportunity and caution. While October saw strong gains, near-term movements will depend on the US dollar trend, Fed policies, and domestic demand dynamics. Investors in India continue to monitor prices carefully, favoring measured buying over speculative moves.