MCX Gold Dips Rs 1,200; Silver Slides Amid Strong Dollar & Rate Concerns
MCX gold and silver drop amid stronger dollar and slowing rate cut expectations. Investors track US payroll data and global market trends.
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The domestic futures for both gold and silver dropped sharply on Tuesday, with the decline in gold prices being the highest at 2%, as investors reacted to the diminishment of the US Federal Reserve's rate cut prospects in December coupled with the easing of US tariffs concerns.
The gold contracts for December trading on the MCX exchange fell by 1.14% to Rs 1,21,521 per 10 grams at 9:25 am, while the price of silver for December delivery went down by 1.75% to Rs 1,52,600 per kilogram.
The decline was similar to the movement of the international markets, where gold had become cheaper for the fourth consecutive day because of the dollar's strength. The dollar index climbed to 99.59, which made dollar-priced gold more expensive in other currencies and thus the global demand for it went down.
The US government had been shut down for 43 days and this had delayed the release of economic indicators that are important for the market. Now that the shutdown is over, market participants are looking at the data that will be released later in the week, especially on Thursday when the September nonfarm payrolls report comes out, which will have a significant impact on the forecasting of Fed’s monetary policy.
The Fed officials have presented contradictory signals regarding the changes of interest rates. As reported by Reuters, Fed Vice Chair Philip Jefferson was telling that a reduction of rates even slower than usual would discourage the market with hopes of a December cut.
