Gold and silver prices fell sharply this week as investor demand weakened amid optimism over a potential US-China trade deal and a strengthening US dollar.
Gold Futures Drop
On the Multi Commodity Exchange (MCX), gold futures for December delivery fell by Rs 1,546 per 10 grams (1.25%), closing at Rs 1,21,905 per 10 grams with a trading volume of 12,428 lots.
Over the holiday-shortened week, gold lost a total of Rs 3,557 (2.80%).
“Gold prices continue to decline as safe-haven demand softens amid trade optimism and a stronger dollar,” said Darshan Desai, CEO of Aspect Bullion & Refinery.
The Dollar Index, which tracks the greenback against six major currencies, inched higher by 0.03% to 98.98.
Silver Prices Also Slide
Silver futures for December delivery on the MCX dropped Rs 1,964 (1.33%), settling at Rs 1,45,506 per kilogram with 20,367 lots traded.
During the past week, silver fell by Rs 9,134 (5.83%), reflecting global trends.
Internationally, Comex gold futures for December delivery fell USD 61.69 (1.49%), trading at USD 4,076.11 per ounce, while Comex silver was down 1.44% at USD 47.88 per ounce.
Trade Deal Optimism Drives Decline
Progress in US-China trade talks contributed to the decline in bullion prices. Negotiators from Washington and Beijing reached a preliminary agreement in Malaysia covering export controls, fentanyl trafficking, agricultural trade, and shipping levies.
This agreement sets the stage for US President Donald Trump and Chinese President Xi Jinping to finalize a deal during their upcoming meeting in South Korea, according to Jigar Trivedi, Senior Research Analyst at Reliance Securities.
Market Outlook and Investor Advice
Experts warn that gold investors should expect short-term volatility.
Darshan Desai advised that further progress in trade negotiations or gains in the US dollar could trigger more profit-taking in gold.
Trivedi also noted that market participants are closely watching major central bank decisions this week. The Federal Reserve is expected to cut rates by 25 basis points after softer-than-expected inflation data, while the European Central Bank and Bank of Japan are likely to maintain current policy rates.
Key Takeaways
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Gold futures drop Rs 1,546 per 10 grams on MCX
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Silver futures fall Rs 1,964 per kg
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US-China trade optimism weakens safe-haven demand
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Strong US dollar contributes to price decline
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Investors warned to expect volatility and short-term swings
