Gold edges lower on stronger dollar, Fed minutes weigh on rate-cut hopes

Gold prices edged lower in Thursday’s morning trading session on the Multi Commodity Exchange, influenced by dollar strength and cautious signals from the US Federal Reserve.

At approximately 9:45 am, December Gold futures on MCX declined by 0.23% to ₹1,22,768 per 10 grams.

Meanwhile, Silver contracts showed resilience with a 0.39% gain, trading at ₹1,55,717 per kilogram.

Market analysts highlighted key technical levels: “Gold finds immediate support at ₹1,22,200 and ₹1,21,650, with resistance pegged at ₹1,23,800 and ₹1,24,400. For silver, support rests at ₹1,54,000 and ₹1,52,500 while resistance stands at ₹1,56,600 and ₹1,58,000.”

The dollar index strengthened to 100.30 during the session, reaching its highest level in over two weeks. This currency appreciation typically dampens gold’s appeal for international buyers.

Additional pressure emerged following Wednesday’s release of minutes from the Federal Reserve’s October policy meeting, which revealed policymakers’ reluctance to implement swift interest rate reductions.

These developments diminished market expectations for potential December rate cuts, contributing to gold’s downward movement.

Market specialists observed, “Bullion pared gains post-release of the Fed minutes as traders monitored delayed economic data from Japan and awaited clearer signals.”

“The meeting minutes revealed internal divisions within the Federal Reserve, with officials cutting rates last month despite concerns about potentially reigniting inflationary pressures that have persisted above the 2% target for four consecutive years,” analysts noted.

They further added, “Chairman Powell emphasized caution, clarifying that a December rate reduction shouldn’t be considered predetermined.”

(With inputs from IANS)