The precious metals market took a turn on Friday, with gold and silver futures losing their shine. This retreat was influenced by a combination of factors, including a subdued global market demand and fading hopes of an imminent rate cut by the US Federal Reserve.
On the Multi Commodity Exchange (MCX), gold futures for December delivery witnessed a decline of Rs 345, settling at Rs 1,26,406 per 10 grams. The February 2026 contract followed suit, dropping by Rs 434 to Rs 1,27,973 per 10 grams. Silver futures, which had been on a five-day rally, took a sharp turn, with the December contract plunging Rs 1,190 to Rs 1,61,280 per kilogram. The March 2026 contract also tumbled, losing Rs 1,164 to Rs 1,64,200 per kg.
In the international arena, Comex gold futures for December delivery remained relatively stable, trading flat at $4,195 per ounce. Jigar Trivedi, a Senior Research Analyst at Reliance Securities, attributed the rise in gold prices above $4,190 per ounce on Friday to a softer dollar and the uncertainty surrounding the backlog of official data due to the US government's recent reopening.
The dollar index, a key indicator of the US dollar's strength, was trading 0.06% higher at 99.21. Kevin Hassett, Director of the White House's National Economic Council, highlighted the possibility of certain October figures never materializing due to data collection disruptions during the government shutdown.
Trivedi emphasized that while some of these releases may appear soon, others could be permanently lost, fueling renewed caution about the US economic outlook. Comex silver futures for December delivery reflected this sentiment, slipping 0.94% to $52.67 an ounce in overseas trade.
Renisha Chainani, Head of Research at Augmont, explained that the reopening of the US government and shifting expectations regarding inflation and the economic slowdown contributed to a decline in silver prices. She noted that the probability of a 25-basis-point rate cut by the Fed in December has decreased from over 95% a month ago to just 50%, while expectations for 2026 remain unchanged.
This development adds a layer of complexity to the market, leaving investors with a crucial question: Will the Fed's rate cut hopes be revived, or will the market continue to navigate these uncertain waters?
