Dollar Strength Weighs on Gold Futures as Fed Keeps Rates Unchanged

Gold futures slipped on Friday as a strong US dollar and the Federal Reserve's cautious stance on interest rates weighed on the market. On the Multi Commodity Exchange, gold for August delivery fell by Rs 181, or 0.13 per cent, to Rs 1,41,600 per 10 grams. The October contract declined by Rs 252, or 0.18 per cent, to Rs 1,43,031 per 10 grams.

The yellow metal's decline was attributed to the US Federal Reserve's decision to maintain the federal funds rate at 3.5-3.75 per cent and its data-dependent approach to monetary policy. According to Ankita Pathak, Head of Global Investments at Ionic Asset, Fed Chair Kevin Warsh refrained from providing forward guidance, reinforcing the central bank's cautious stance.

The strong US dollar also contributed to gold's decline, as a higher dollar makes dollar-denominated assets more expensive for foreign investors. This weighed on commodities and other emerging market assets, said Deveya Gaglani, Senior Research Analyst - Commodities, Axis Direct.