Gold Prices Fall on Softer Demand Amid Hawkish Fed Commentary
Gold and silver prices declined in domestic futures trade on September 21, due to softer spot demand and a shift in market positioning. The Multi Commodity Exchange (MCX) saw gold futures for October delivery fall ₹773, or 0.5%, to ₹1.53 lakh per 10 grams. Silver futures for December delivery declined ₹2,024, or 0.84%, to ₹2.39 lakh per kg.
Globally, gold and silver prices also fell. Gold futures were down 0.53% at around $4,355.59 an ounce, while silver was trading 0.20% lower at $66.12 an ounce. Gaurav Garg, head of research at Lemonn, attributed the decline to hawkish commentary from the US Federal Reserve and inflation concerns.
The dollar's strength and rising bond yields are also contributing factors, making non-yielding assets like gold less appealing. Geopolitical tensions, on the other hand, can support demand for gold as a safe-haven asset. Domestic prices are influenced by the rupee, with the dollar around 95.87 against the rupee.
Vikram Subburaj, CEO of Giottus.com, cautioned that the recent rebound in bullion prices should not be seen as a return to the earlier uptrend. He emphasized that global bullion prices are only one part of the equation, and the rupee's movement also affects domestic prices.