Gold Holds Steady as Investors Watch US Rate Outlook
Gold prices held steady while silver dipped in global markets on Tuesday, October 6, as investors evaluated the potential trajectory of US interest rates. On COMEX, gold futures rose slightly by $2.60, or 0.06%, to $4,159.40 an ounce, while silver futures fell by $0.20, or 0.33%, to $61.10 an ounce. In the spot market, gold remained nearly unchanged at $4,141.31 an ounce, indicating a brief pause after recent declines.
The movement of gold and silver prices continues to be influenced by US Treasury yields and Federal Reserve rate expectations. Higher bond yields reduce the appeal of holding non-interest-bearing precious metals, and a stronger US dollar makes them more expensive for international buyers. Elevated Treasury yields, driven by inflation and government debt concerns, have kept pressure on precious metals, though softer jobs data has slightly eased expectations of an imminent rate hike by the Federal Reserve.
Market participants are closely monitoring upcoming US economic data, particularly the jobs report, for further insights into the Federal Reserve's policy direction. Geopolitical developments and oil prices are also contributing factors as they shape inflation expectations and interest rate outlooks.
Prithviraj Kothari, managing director of RiddiSiddhi Bullions and president of the India Bullion and Jewellers Association, attributed gold's weakness to concerns over an early Federal Reserve rate hike, a strong dollar, and high Treasury yields. He identified key support levels for gold at $4,110 and $4,000 an ounce. Investors are also watching the Reserve Bank of India's monetary policy decision on October 7, along with US economic data and Federal Reserve officials' statements.
Dhruv Joglekar, assistant fund manager at Monarch PMS, expects gold to find support in October due to increased physical demand during the festive season and ongoing central bank purchases. He emphasized the importance of US economic data and clearer inflation outlook for market movements.
In New Delhi, domestic gold prices of 99.9% purity remained steady at ₹1.49 lakh per 10 grams on Monday, October 5, while silver held at ₹2.27 lakh per kilogram. Subdued demand from jewellers and retailers, along with a firm US dollar, limited price movements. Domestic prices on Tuesday, October 6, will be influenced by international bullion market trends, the rupee-dollar exchange rate, and local demand.