Gold prices declined on the MCX while continuing to rise in international markets on Tuesday, as anticipations of a US Federal Reserve rate increase diminished. Investors are currently anticipating the release of minutes from the central bank’s most recent meeting, seeking new insights into the trajectory of monetary policy. Gold futures for October delivery on the MCX declined approximately 0.6%, equating to Rs 945 per 10 grams, settling at Rs 1,54,995 per 10 grams on Tuesday morning. December contracts decreased by over 0.5% to Rs 1.57 lakh per 10 grams, whereas February futures experienced a decline of 0.7% to Rs 1.59 lakh per 10 grams.
In international markets, spot gold experienced an increase of 0.2%, reaching $4,424.28 per ounce, while US gold futures for December delivery also rose by 0.2%, settling at $4,480.90. The US dollar remained close to multi-month lows against major currencies, resulting in a decrease in the price of dollar-priced gold for holders of alternative currencies. The US Fed is anticipated to maintain its key interest rate at the current level next month and throughout the remainder of the year, as indicated by the majority of economists. Market pricing for a September quarter-point rate hike has also shifted, with traders now assessing a 65% probability of a hold following unexpected job losses in July, softer-than-anticipated consumer inflation, and weaker retail sales.
The conflict’s outbreak in late February resulted in a significant decline in gold prices, which fell from a record $5,595 an ounce in January to below $4,000 in June. This shift occurred as investors prioritised liquidity and certain central banks utilised their reserves to bolster domestic economies in response to rising oil prices. Gold is extending its gains following softer-than-expected US economic data from last week, which has bolstered expectations that the Federal Reserve will maintain interest rates at their current levels for the remainder of the year, as noted market analyst Tony Sycamore.
He added that gold also seems to be regaining its safe-haven appeal, with hawkish rhetoric from Iran assisting the metal in overcoming higher yields. Meanwhile, silver prices experienced a further decline on the MCX. September futures decreased by over 1%, or Rs 2,500 per kg, settling at Rs 2,35,549 per kg in early trade. December contracts experienced a decline of nearly 1%, settling at Rs 2,41,432 per kg.
