Gold prices continued their downward journey for the second consecutive week, marking a notable retreat from record highs as a stronger U.S. dollar, easing geopolitical risks, and the Federal Reserve’s cautious signals on rate cuts dampened investor appetite for safe-haven assets.
On the Multi Commodity Exchange (MCX), gold futures for December delivery fell by Rs 2,219, or 1.8%, over the week, closing at Rs 1,17,628 per 10 grams on October 28. This sharp fall followed nine weeks of steady gains, reflecting a cooling of the recent rally that had driven prices to unprecedented levels.
Gold Prices: Profit-Booking Sparks Correction After Record Highs
Market analysts said both global and domestic gold markets witnessed steep corrections early in the week as traders booked profits following recent highs.
“Heavy profit-booking pushed global gold down from recent peaks to test the $4,000-an-ounce level. Domestic gold mirrored this fall, slipping below Rs 1,19,000 per 10 grams before stabilising in the latter part of the week,”
said Sneha Jain, Investment Manager on Smallcase and Founder & CEO of WealthTrust Capital Services.
Jain added that MCX gold futures showed heightened volatility, dropping from above Rs 1,23,000 to near Rs 1,18,000 per 10 grams, before recovering to around Rs 1,21,500 toward the weekend.
The broader sentiment in the bullion market was clearly cautious, with investors reducing exposure amid shifting macroeconomic cues and a surging dollar.
Strong Dollar and Fed’s Hawkish Tone Pressure Bullion
The U.S. dollar index strengthened after the Federal Reserve’s recent comments suggested that any potential rate cuts would be data-dependent, effectively postponing market hopes for near-term easing.
“The dollar’s rebound made dollar-denominated gold more expensive for foreign investors, triggering a wave of selling. Rising U.S. bond yields also made non-yielding assets like gold less appealing,”
Jain explained.
On Comex, gold futures for December delivery fell by $141.3, or 3.41%, during the week, settling at $3,996.5 per ounce on Friday. The drop came after the yellow metal briefly touched fresh highs earlier in October, followed by profit-taking amid stronger macroeconomic signals.
While the Indian rupee showed mild weakness against the U.S. dollar, offering a partial cushion to domestic gold prices, the overall momentum remained downward.
Gold Prices: Easing Tensions and End of Festive Demand Add to Weakness
According to Sandip Raichura, CEO of Retail Broking & Distribution and Director at PL Capital, the week’s developments created a challenging backdrop for gold.
“Tensions between Russia and Ukraine eased, Trump-Xi talks were positive, the Fed maintained a hawkish tone, and India’s festival buying season concluded — all these factors worked against gold in the short term,”
Raichura said.
The combination of easing geopolitical concerns and fading seasonal demand in India — traditionally a major consumer of gold — weighed further on sentiment.
Silver Finds Support After Sharp Drop
While gold prices slide globally, silver showed surprising resilience after two volatile weeks. On the MCX, silver futures for December delivery rose by Rs 817, or 0.55%, ending their losing streak.
“Silver futures witnessed a steep fall from around Rs 1,55,000 per kg to test Rs 1,45,000 before rebounding slightly,”
Jain noted.
In international trade, Comex silver futures remained largely flat, closing at $48.16 per ounce for the week.
Analysts See Temporary Weakness, Long-Term Strength Intact
Despite the recent dip, experts believe the ongoing correction is a temporary phase in a broader bullish cycle for gold.
N. S. Ramaswamy, Head of Commodities & CRM at Ventura, said the remarks from Fed Chair Jerome Powell effectively cooled the metals rally but did not alter the long-term fundamentals.
“After hitting record peaks, a natural correction and profit-taking phase was expected. But the long-term structural drivers — including spiraling U.S. debt, central bank gold buying, inflationary pressures, and persistent geopolitical risks — remain strongly supportive,”
Ramaswamy observed.
He further added that sustained central bank accumulation could push gold toward new record highs in the coming months.
“Western sanctions have encouraged central banks to diversify away from the dollar. Ballooning fiscal deficits, rising U.S. debt, and government shutdown risks are adding to gold’s safe-haven appeal,”
Ramaswamy concluded.
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