New Delhi (Economy India): Gold prices came under pressure in futures trade on Tuesday, with the October contract on the Multi Commodity Exchange (MCX) falling Rs 914 to Rs 1,52,180 per 10 grams, as a stronger US dollar and hawkish signals from the US Federal Reserve weighed on investor sentiment.
The yellow metal initially opened on a positive note, extending its early gains before reversing sharply during the session. The October gold futures contract touched an intraday high of Rs 1,53,497 per 10 grams, up Rs 403 from the previous close.
However, the contract subsequently lost ground and declined Rs 914, or nearly 1 per cent, to settle at Rs 1,52,180 per 10 grams.
Stronger Dollar Puts Pressure on Gold
The decline in domestic gold futures came amid strengthening of the US dollar, which generally makes dollar-denominated gold more expensive for holders of other currencies.
A stronger dollar can reduce demand for gold in international markets, particularly when investors reassess their exposure to non-yielding assets.
The movement in gold prices also reflected caution among investors following signals from the US Federal Reserve that suggested a relatively hawkish approach to monetary policy.
Hawkish Fed Signals Weigh on Investor Sentiment
Gold is traditionally viewed as a safe-haven asset and does not generate interest income. Consequently, expectations surrounding US interest rates can have a significant influence on investor demand for the precious metal.
Hawkish monetary-policy signals can support the dollar and Treasury yields, potentially reducing the attractiveness of gold compared with interest-bearing assets.
Investors are therefore closely tracking Federal Reserve commentary and economic indicators for clues about the future direction of US monetary policy.
Gold Reverses Early Gains
The session’s movement highlighted the volatility in the precious metals market.
The October contract began trading at a higher level and gained Rs 403, reaching Rs 1,53,497 per 10 grams during the early part of the session.
The gains, however, failed to sustain as selling pressure emerged later in the trade. Gold futures subsequently slipped below the Rs 1.53 lakh level and touched Rs 1,52,180 per 10 grams.
The reversal indicates that investors remain sensitive to movements in the dollar and changes in expectations about global interest rates.
MCX Gold Price Movement
| Particulars | October Gold Futures |
|---|---|
| Opening | Firm |
| Intraday High | Rs 1,53,497/10g |
| Change from Previous Close at High | +Rs 403 |
| Latest Price | Rs 1,52,180/10g |
| Fall | Rs 914 |
| Percentage Decline | Nearly 1% |
| Exchange | MCX |
Outlook Remains Sensitive to Global Factors
Gold prices are likely to remain sensitive to movements in the US dollar, interest-rate expectations and signals from major central banks.
Investors will also watch upcoming US economic data and developments in global financial markets for indications about the direction of bullion prices.
For domestic investors, movements in international gold prices, the rupee-dollar exchange rate and domestic market conditions can together influence MCX gold futures.
The latest decline comes after gold had witnessed strong gains in recent months, keeping the precious metal firmly on investors’ radar amid shifting expectations over global monetary policy and economic growth.
(Economy India)
