Gold Prices Fluctuate as Futures Rise on MCX, Retail Prices Drop

Gold prices exhibited a mixed trend on Thursday, with futures rates on the Multi-Commodity Exchange (MCX) increasing, while retail prices for gold in India experienced a slight decline. Investors are closely monitoring developments related to the India-US trade deal and forthcoming US inflation data, both of which may significantly impact global market sentiment.

MCX Gold Futures Rise

On the MCX, December gold futures rose by 0.89% to Rs. 1,22,938 per 10 grams. Silver December contracts also gained, increasing 0.93% to Rs. 1,46,915 per kilogram. Analysts anticipate that gold for December delivery will trade within the range of Rs. 1,21,500 to Rs. 1,23,000 per 10 grams. In contrast, international gold prices saw a minor decline of 0.2%, settling at $4,084.29 per ounce as the US dollar index strengthened by 0.2%. Meanwhile, US gold futures advanced by 0.9% to $4,100.90 per ounce, while silver traded marginally higher at $48.82 per ounce.

Domestic Price Declines in Major Cities

In Mumbai, gold prices decreased from the previous session. The cost of 24-carat gold is now Rs. 12,508 per gram, down Rs. 81, leading to a price of Rs. 1,25,080 for 10 grams, a decline of Rs. 810. Similarly, the price for 22-carat gold fell to Rs. 11,465 per gram, a drop of Rs. 75, resulting in Rs. 1,14,650 for 10 grams, down Rs. 750. This decline is attributed to mild profit booking and a stronger Indian rupee, which has slightly reduced import costs.

In Chennai, gold prices also saw a decrease. The current rate for 24-carat gold is Rs. 12,546 per gram, down Rs. 43, while the price for 10 grams is Rs. 1,25,460, a decline of Rs. 430. The price of 22-carat gold in Chennai is Rs. 11,500 per gram, down Rs. 40, and Rs. 1,15,000 for 10 grams, a reduction of Rs. 400.

Global dynamics have heavily influenced these price changes. Gold prices have surged more than 55% this year, driven by global risks, consistent purchases by central banks, and anticipated interest rate cuts by the US Federal Reserve. However, the attraction of gold as a safe-haven asset has somewhat diminished due to positive sentiment surrounding potential trade agreements between the United States and both India and China.

Jigar Trivedi, Senior Research Analyst at Reliance Securities, indicated that gold typically gains when interest rates are low, as this reduces the opportunity cost of holding non-yielding assets. With US inflation data due this week and market expectations for a 25-basis-point rate cut in the upcoming Federal Reserve meeting, analysts predict that gold will remain resilient. This resilience is further bolstered by festive demand in India and ongoing geopolitical uncertainties.