Gold Futures on MCX Tumble as Stronger Dollar and Higher Yields Weigh
Gold and silver futures on India's Multi Commodity Exchange (MCX) continued to trade lower on Thursday, September 24. The weakness comes after a sharp fall in global bullion prices in the previous session due to stronger-than-expected US economic data.
The data raised expectations that the Federal Reserve could keep monetary policy tighter for longer, increasing pressure on precious metals. MCX gold futures for October delivery were down 0.55% at ₹1.50 lakh per 10 grams, while silver futures for December delivery declined 1.16% to ₹2.33 lakh per kg.
Aamir Makda, Commodity & Currency Analyst, Technical Research at Choice Broking, said MCX gold has continued its negative momentum due to a stronger US dollar and Treasury yields. The dollar index rose to the 101 mark, its highest level in almost two months.
According to Ashish Rajodiya, Head, Commodities at PL Capital, gold was trading around $4,288 an ounce globally with the dollar index rising to the 101 mark. Higher yields can weigh on gold because it does not offer interest income, while a stronger dollar makes dollar-denominated bullion more expensive for holders of other currencies.
Geopolitical risks continue to provide some support to bullion, however. Iran's President Masoud Pezeshkian warned in his UN General Assembly address that Tehran would not allow freedom of navigation through the Strait of Hormuz while sanctions remain in place.