Gold Dips 1% in India as Strong Dollar Limits Recovery
Gold prices in India dropped nearly 1% to Rs 1.49 lakh per 10 grams in futures trading on Monday, as the strengthening US dollar capped bullion’s recovery. On the Multi Commodity Exchange (MCX), December gold futures declined by Rs 1,020 to Rs 1,49,370 per 10 grams. The metal had already lost Rs 2,887, or 2%, in the previous week, closing at Rs 1.5 lakh per 10 grams.
Analysts attributed the decline to a consolidating phase driven by a stronger US dollar and elevated bond yields, which are limiting upward momentum. The dollar index neared an 18-month high of 102.37, exerting pressure on gold prices. Meanwhile, global gold futures on the Comex traded marginally higher at USD 4,163.50 per ounce in New York.
Despite briefly surpassing USD 4,200 last Friday, gold remains above USD 4,150 per ounce in international markets. A weaker US jobs report reduced expectations of an October rate hike by the Federal Reserve to below 20%, though a December hike is still priced in at nearly 70%.
Last week, global gold prices fell USD 158.9, or 3.7%, to close at USD 4,162.3 per ounce, while silver dropped USD 4.38, or 6.7%, to USD 60.41 per ounce. Analysts noted that elevated US Treasury yields, hovering around 5.2%, are constraining gold’s recovery amid persistent inflation and fiscal concerns.
Investors are now focusing on upcoming economic data, including Services PMI figures, US trade numbers, and consumer sentiment reports, which could influence precious metal volatility. Geopolitical tensions, particularly the unresolved US-Iran situation, may also impact market movements.