Gold and silver prices dip: Factors driving the market

Gold and silver prices were subdued on Thursday (November 20) as global cues turned cautious, even as domestic demand in India stayed firm ahead of the peak wedding season.

In India, 24-karat gold is priced at ₹12,469 per gram, while 22-karat stands at ₹11,430. Silver trades at ₹165 per gram (₹1.65 lakh per kg).

Internationally, spot gold slipped 0.4% to $4,064 per ounce, while US gold futures fell 0.5%, pressured by a stronger dollar and reduced expectations of a US Federal Reserve rate cut in December.

“Rate-cut bets have been pared back quite remarkably in the last two weeks,” said Kelvin Wong, senior market analyst at OANDA, who expects gold to stay below $4,100 in the short term with potential dips toward $4,000–$3,980.

The probability of a December rate cut has fallen to around 33%, from nearly 50% earlier, as the dollar strengthened and the Fed’s latest minutes signalled caution on easing.

“This was a divided Federal Reserve that cut rates last month despite worries that easing too soon could undermine progress on inflation,” said Manav Modi, Analyst – Precious Metals, Motilal Oswal Financial Services.

He added that the cancellation of the October US employment report and concerns around Japan’s carry-trade unwinding have added to volatility.

Attention now turns to the delayed US non-farm payrolls report, expected to provide further policy cues.

Despite global softness, domestic sentiment remains supported by wedding-season buying. “Prices for 24-carat gold have increased slightly, supported primarily by wedding season purchases and investors’ continued interest,” said Aksha Kamboj, Vice President, IBJA. For silver, she noted steady demand from jewellery and investment buyers.

According to Rahul Kalantri, VP Commodities, Mehta Equities, gold has support at $4,035–4,000 an ounce and resistance at $4,115–4,140 an ounce.

-With Reuters inputs