Gold Futures Dip ₹914 to ₹1.52 Lakh/10g Amid Strengthening Dollar and Hawkish Fed Stance

Gold prices experienced a notable decline on Tuesday, shedding ₹914 to settle at ₹1.52 lakh per 10 grams in futures trade, following a stronger dollar and hawkish signals from the US Federal Reserve. Initial trading saw the yellow metal appreciate by ₹403, reaching an intraday high of ₹1,53,497 per 10 grams before reversing to close at ₹1,52,180 per 10 grams. Simultaneously, Comex gold futures for December delivery witnessed a drop of $28.45, approximately 1%, closing at $4,355.45 per ounce in New York.

The main drivers for this downward movement include a significant rise in the dollar index, which strengthened to around 100.3 amidst expectations of further interest rate hikes by the Federal Reserve. These hawkish comments have instilled caution among investors, despite the US 10-year yield easing slightly to 4.95%. Market sentiment remains cautious as investors anticipate additional insights into the Federal Reserve’s monetary policy from upcoming speeches by FOMC members, alongside key ADP employment data that could impact economic projections.

In the short-term, traders and investors should prepare for continued volatility in gold prices as market participants await further direction from the Federal Reserve. The potential for additional interest rate hikes could place downward pressure on gold as a non-yielding asset, while geopolitical tension and macroeconomic indicators will remain critical in shaping market sentiment. A cautious approach is advised as external economic factors could impact investment strategies.

Source: Market Source

(Expert Note: This report was independently prepared by the Wealthova Commodities team.)