Gold Prices Tumble on Strong US Dollar, Federal Reserve Caution

Gold futures slipped on Thursday as the US dollar strengthened and the Federal Reserve maintained its cautious stance on interest rates. The August delivery of gold on the Multi Commodity Exchange fell by Rs 181, or 0.13%, to Rs 1,41,600 per 10 grams.

The decline in gold prices was also reflected in the October contract, which dropped by Rs 252, or 0.18%, to Rs 1,43,031 per 10 grams on the commodities bourse.

According to Deveya Gaglani, Senior Research Analyst - Commodities at Axis Direct, gold turned lower as a firm dollar and the Fed's cautious stance on interest rates weighed on the yellow metal. The US Federal Reserve had kept the federal funds rate unchanged at 3.5-3.75% and maintained ample reserves in the banking system.

Ankita Pathak, Head of Global Investments at Ionic Asset, noted that Fed Chair Kevin Warsh refrained from providing forward guidance, reinforcing the central bank's data-dependent approach.