Gold and silver prices on the Multi Commodity Exchange (MCX) continued their downward trend on Thursday, October 29, as investors reacted to the US Federal Reserve’s latest interest rate decision and awaited fresh inflation data. December gold futures dropped 0.28% to ₹1.43 lakh per 10 grams, while December silver futures fell 1.18% to ₹1.92 lakh per kg.
The decline in precious metals comes amid uncertainty over the US Federal Reserve’s policy outlook. Although the Fed kept its policy interest rate unchanged at 3.75%-4.00%, two Fed officials hinted at the possibility of further rate hikes, which could weigh on gold and silver. Higher interest rates make non-yielding assets like gold less attractive compared to interest-bearing investments.
Silver faced steeper selling pressure than gold, a trend attributed to its higher volatility and sensitivity to shifts in investor sentiment. According to Gaurav Garg, Head of Research at Lemonn, silver’s sharper decline highlights its greater vulnerability to market fluctuations.
Investors are now focusing on the upcoming US personal consumption expenditures (PCE) inflation report, which could influence expectations around future interest rate decisions. Movements in the US dollar and Treasury yields will also play a role in shaping demand for precious metals.
For domestic buyers, short-term price declines may impact purchasing decisions, but cultural factors like the festive season and wedding season are expected to sustain interest in gold and silver. Samit Guha, Managing Director and CEO of MMTC-PAMP, noted that elevated gold prices might encourage consumers to opt for smaller-denomination bars and coins, while digital gold could attract younger investors.