New Delhi: Gold prices declined by Rs 612 to Rs 1,09,210 per 10 grams in domestic futures trade on Thursday. This drop came as speculators cut positions following a firm recovery in the US dollar, which was driven by the US Federal Reserve’s cautious policy stance that dampened bullion’s recent rally.
On the Multi Commodity Exchange (MCX), gold futures for October delivery depreciated Rs 612, or 0.56%, to Rs 1,09,210 per 10 grams. The December contract also fell by Rs 566, or 0.51%, to Rs 1,10,300 per 10 grams.
Silver prices weakened as well. The white metal futures for December delivery slipped Rs 604, or 0.48%, to Rs 1,26,380 per kilogram, while the March contract for next year declined Rs 630, or 0.49%, to Rs 1,27,985 per kilogram.
“The Federal Reserve announced its first 25 basis point rate cut of 2025, which aligned with market expectations. However, the policy stance for 2026 was less dovish, as markets are now anticipating only one potential rate cut next year,” said Deveya Gaglani, Senior Research Analyst – Commodities, Axis Securities.
She added, “This shift in outlook weighed on bullion prices, which had rallied strongly in recent weeks on aggressive rate cut bets and increased geopolitical tensions.”
The Federal Reserve stated on Wednesday that economic activity moderated in the first half of the year, job gains slowed, unemployment edged up, while inflation remained somewhat elevated.
“In light of the shift in the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 4-4.25 per cent,” the US central bank added.
Commodities market experts noted that the central bank has still signaled two more rate cuts this year, which could support gold prices in the medium term.
Globally, gold futures for December delivery dropped USD 28.05, or 0.75%, to USD 3,689.75 per ounce after hitting a record high of USD 3,744 in the previous session. Silver futures were down 1.05% at USD 41.71 per ounce, retreating from a 14-year high of USD 43.43 earlier this week.
Fed Chair Jerome Powell described the latest rate cut as “risk management” amid labour market weakness, emphasizing that there is no need to rush easing measures. However, newly appointed Governor Stephen Miran dissented, seeking a larger 50 basis points cut.
The dollar index, which measures the greenback’s strength against a basket of six major currencies, rose 0.35% to 97.21, further weighing on bullion prices.
“The dollar index hovered above 97 on Thursday after rebounding sharply in the prior session, as investors reassessed the Federal Reserve’s policy outlook,” said Jigar Trivedi, Senior Research Analyst at Reliance Securities.
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