Gold Prices Today: Yellow metal set for biggest weekly drop in 3 years after Powell urges caution on rate cuts

Gold Prices Today: Gold prices on Friday, November 15, were on track for their biggest weekly decline in over three years as expectations of less aggressive interest rate cuts by the US Federal Reserve lifted the US dollar, denting allure for bullion among investors in the commodity market.

Spot gold last rose 0.2 per cent to $2,571.99 per ounce. Gold prices have fallen more than four per cent this week, touching their lowest since September 12 on Thursday. Back home, gold futures settled 0.11 per cent higher at ₹74,031 per 10 grams on the multi-commodity exchange (MCX).

US gold futures were also flat at $2,573.00. Spot silver rose 0.6 per cent to $30.63 per ounce, platinum was up 0.7 per cent at $946.31, and palladium added 1.6 per cent to $955.80. All three precious metals were on track for weekly declines pressured by subdued demand.

Also Read: Gold price today: MCX gold rate falls below ₹74,000 per 10 grams; silver price drops by ₹1,100

Gold sheds 4% in five days: What's weighing on the yellow metal?

-The US dollar was set for its biggest weekly gains in over a month, making gold more expensive for other currency holders. US Treasury yields also extended gains. US Treasury yields, meanwhile, extended gains after data showed retail sales in the world's largest economy rose more than expected last month.

-Analysts say all the uncertainties, specifically the short-term uncertainties, have been removed from the mix. Now, gold is just going back to basic fundamentals. Economists believe President-elect Donald Trump's tariff plans would stoke inflation, potentially slowing the Fed's rate easing cycle.

Higher interest rates make holding gold less attractive as it is a non-yielding asset. On Thursday, Fed chair Jerome Powell said the US central bank did not need to rush to lower interest rates. Markets now see a 59 per cent chance of a 25 basis point rate cut in December, down from an 83 per cent chance.

-Analysts notice that Trump's election has negatively impacted gold so far, but this can change if there is more uncertainty, which could come back in the medium term. Traders will now be on the lookout for remarks from several Fed officials scheduled to speak later in the day.

Also Read: US Fed Chair Jerome Powell says no need to rush rate cuts amid strong economy

Where is gold headed?

Market experts say gold's weakness persisted with the price falling below 2550$ and near 73500rs in MCX as the dollar climbed above 106.50 and edged closer to 107. The US CPI data, which came in higher at 2.6 per cent compared to the expected 2.4 per cent, fueled the US dollar's strength. 

“While the Fed has been continuing with rate cuts as inflation approached its two per cent target, the higher-than-expected CPI reading raises concerns that further cuts may be paused. This development added pressure on gold prices, which reacted negatively to the stronger dollar and the potential shift in Fed policy,” said Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.

Some analysts also believe that while inflation saw a slight uptick, it remains within manageable levels and is not expected to alter the Federal Reserve's current monetary easing stance. Gold and silver continue to decline amidst the relentless rally of the US dollar and cryptocurrencies.

Also Read: US Fed rate cut: First inflation uptick in 7 months does little for Powell-led FOMC’s December plans; here’s why

US 10-year bond yields have also surged past the 4.40 per cent mark, further discouraging investors from holding precious metals. The dollar index crossed 106.40, nearing its highest level in almost a year, following Donald Trump’s victory in the US Presidential election. Bitcoin reached an unprecedented $93,000 per coin, with heightened investor enthusiasm for cryptocurrencies curbing the demand for gold and silver.

"Gold has $2,540–2,520 support, with resistance between $2,582 and $2,605. Silver finds support at $29.88–29.65, while resistance lies between $30.47 and $30.72. In INR terms, gold has support at ₹74,050–73,880 and resistance at ₹74,510–74,780. Silver has support at ₹88,380–87,550, with resistance ranging from ₹89,550 to ₹90,780," said Rahul Kalantri, VP of Commodities, Mehta Equities Ltd.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.