Gold and silver prices fell sharply this week as global investors reacted to growing optimism over a potential US-China trade agreement and a stronger US dollar, reducing demand for safe-haven assets.
Gold Futures Drop on MCX
On the Multi Commodity Exchange (MCX), gold futures for December delivery fell by Rs 1,546 (1.25%), closing at Rs 1,21,905 per 10 grams. The yellow metal lost a total of Rs 3,557 (2.80%) during the holiday-shortened week.
“Gold prices continue to slide as safe-haven demand weakens amid optimism over US-China trade talks and a stronger dollar,” said Darshan Desai, CEO of Aspect Bullion & Refinery.
The dollar index, which measures the greenback’s strength against six major currencies, inched higher by 0.03% to 98.98, pressuring gold further.
Silver Futures Also Decline
Silver futures on MCX mirrored gold’s losses. December delivery contracts dropped by Rs 1,964 (1.33%) to Rs 1,45,506 per kilogram, with a trading volume of 20,367 lots. Over the past week, silver lost Rs 9,134 (5.83%), reflecting weaker demand.
In international markets, COMEX gold futures for December delivery fell USD 61.69 (1.49%), trading at USD 4,076.11 per ounce. Similarly, COMEX silver futures were down 1.44%, quoted at USD 47.88 per ounce.
Trade Deal Optimism Weighs on Precious Metals
Experts note that progress in US-China trade negotiations is limiting the appeal of gold and silver as safe-haven investments. After two days of discussions in Malaysia, top officials from Washington and Beijing reached a preliminary consensus on key issues including export controls, fentanyl trafficking, agricultural trade, and shipping levies.
This sets the stage for US President Donald Trump and Chinese President Xi Jinping to finalize the deal during their meeting in South Korea later this week, analysts said.
“Gold prices fell to around USD 4,070 per ounce on Monday, extending Friday’s losses as trade deal optimism reduced safe-haven demand,” said Jigar Trivedi, Senior Research Analyst at Reliance Securities.
Expert Advice for Investors
Darshan Desai cautioned that investors considering gold as a hedge should prepare for short-term volatility and sudden price swings. Positive developments in trade negotiations or further gains in the US dollar may trigger more profit-taking in gold.
Analysts are also monitoring major central bank decisions this week. The Federal Reserve is widely expected to cut interest rates by 25 basis points after weaker-than-expected inflation data, while the European Central Bank and Bank of Japan are expected to maintain current rates.
Gold and silver investors should stay alert to market trends, trade developments, and currency movements to manage risk effectively.
