Investor sentiment weakens as safe-haven demand declines; prices remain range-bound during holiday week
New Delhi (Economy India): Gold prices declined for the third consecutive week as the US dollar strengthened and cautious comments from Federal Reserve officials dampened investor sentiment toward the precious metal.
Analysts noted that the dollar’s sustained rise and the Fed’s continued “wait-and-watch” approach on interest rates have reduced the appeal of gold as a safe-haven investment.
Dollar Strength and Fed Signals Pressure Bullion Markets
A strong US dollar makes gold more expensive for holders of other currencies, thereby lowering international demand.
Market experts said investors shifted focus to higher-yielding assets amid expectations that the Federal Reserve will keep rates elevated for a longer period to contain inflation.
“Gold remains under pressure as the dollar index continues to gain strength. Fed officials’ hawkish tone is leading investors to stay cautious, keeping prices subdued,” said a commodity analyst from a leading brokerage firm.
Muted Trading During Holiday Week
Due to the holiday-shortened trading week, trading activity in global bullion markets remained subdued, with prices fluctuating within a narrow range.
In domestic markets, gold prices hovered between ₹71,000–₹71,800 per 10 grams, depending on purity and region.
Analysts said local demand was steady ahead of the festive season, but global headwinds limited major upward movement in prices.
Silver Follows Gold’s Trend
Silver also mirrored gold’s movement, recording a marginal decline in weekly trade. The metal traded around ₹83,000 per kg, tracking international trends and industrial demand patterns.
Experts believe both gold and silver could see short-term volatility as global markets await fresh data on US inflation and employment figures.
Cautious Sentiment Likely to Continue
According to commodity experts, gold prices are likely to remain range-bound in the near term, influenced by US economic data releases and the dollar’s trajectory.
However, long-term fundamentals remain positive due to geopolitical uncertainties and central banks’ continued bullion accumulation.
“Any signal from the Fed hinting at rate cuts in early 2026 could trigger renewed buying interest in gold,” analysts added.
(Economy India)
