1 week ago
Gold prices continued their downward trend on Monday (November 11), marking a second consecutive session of losses. Spot gold fell by 0.5%, reaching $2,671.49 per ounce, while US gold futures dropped 0.6% to $2,678.50.
The decline comes as investors await critical US economic data and commentary from Federal Reserve officials this week, seeking clarity on the future of US interest rates.
In India, gold prices also witnessed a significant dip due to a stronger US dollar and rising treasury yields.
As of November 11, 22-carat gold was priced at ₹7,220 per gram, down from 7,750 in recent days.
Similarly, 24-carat gold saw a decline, with 10 grams priced at ₹78,760, according to Goodsreturn data.
Experts attribute the recent price fluctuations to multiple factors, including the impact of the US elections.
Yeap Jun Rong, an IG market strategist, explained that gold was once seen as a safe haven against US political risks. However, with the quicker-than-expected conclusion of the election and the stronger US dollar, many investors have moved away from gold.
The strengthening dollar index, which rose by 0.6% last week, has made gold less appealing to holders of other currencies. As a result, gold prices have struggled to gain momentum, with traders anticipating a cautious approach from the Federal Reserve moving forward.
Several Fed officials, including Chair Jerome Powell, are set to speak this week, and their remarks could provide insight into the direction of interest rates.
US consumer and producer price index data, along with retail sales figures, will also play a key role in shaping market sentiment.
While gold has traditionally been viewed as a hedge against inflation, rising interest rates increase the opportunity cost of holding the metal, weighing on its appeal.
According to the CME Fedwatch tool, traders see a 65% chance of a 25-basis-point Fed rate cut in December, with a 35% chance of no change.
In China, consumer prices rose at their slowest pace in four months in October, adding to concerns over the country’s economic slowdown. Despite efforts from Beijing to stimulate the economy, the deepening deflationary trend in producer prices suggests a prolonged period of economic challenges.
Renisha Chainani, Head of Research at Augmont - Gold For All, noted that gold remains volatile due to ongoing uncertainty regarding US economic policies, including tariffs and tax changes under the new administration.
Looking ahead, Chainani forecasts that gold could continue its retracement, with prices possibly stabilising between ₹74,000 and ₹74,500 per 10 grams in India. Investors are advised to stay cautious in the short term, with further volatility likely as economic and geopolitical conditions evolve.
