Gold and silver pause after recent swings: Will the momentum return soon?

Gold prices were steady on Monday (November 3) as a stronger US dollar and reduced bets on further Federal Reserve rate cuts weighed on investor sentiment.

Spot gold held at $4,000.65 per ounce as of 0504 GMT, while US gold futures for December delivery inched up 0.4% to $4,010 an ounce. The metal has eased nearly 9% from its all-time high of $4,381.21 an ounce hit on October 20.

In India, 24-karat gold was priced at ₹12,317 per gram, 22-karat at ₹11,290, and 18-karat at ₹9,238. Silver traded at ₹154 per gram or ₹1,54,000 per kilogram in Delhi.

“The dollar remains resilient, which is capping any major upside in gold,” said Kelvin Wong, senior market analyst at OANDA.

Dollar strength and Fed stance limit bullion’s momentum

The Federal Reserve’s October 29 rate cut—its second this year—was overshadowed by Chair Jerome Powell’s hawkish tone, signalling limited room for more easing in 2025. The CME FedWatch Tool now shows a 71% probability of another cut in December, down from over 90% earlier.

Gold, which typically benefits from lower interest rates and economic uncertainty, has faced pressure as risk appetite improves and yields remain relatively high.

Trade détente and China’s policy shifts shape sentiment

Market optimism rose after US President Donald Trump and Chinese President Xi Jinping agreed to scale back tariffs, with Washington trimming duties from 57% to 47% and Beijing pledging greater soybean purchases and rare earth exports.

China also removed a 6% VAT incentive on gold sales, which could lift local prices and slightly curb demand in one of the world’s largest bullion markets.

Investment demand strong, jewellery sales slow

The World Gold Council reported that ETF inflows reached 222 tonnes in the third quarter, while bar and coin demand stayed above 300 tonnes. Central bank buying rose 28% quarter-on-quarter to 220 tonnes, highlighting steady institutional interest.

However, jewellery demand fell for the sixth straight quarter to 371 tonnes, as high prices deterred consumers.

According to Augmont Goldtech, gold is consolidating between $3,920 and $4,060 an ounce (~₹1.19–1.22 lakh per 10 grams) and silver between $46 and $49 an ounce (~₹1.4–1.5 lakh per kg). A breakout beyond these ranges could trigger a 3–5% move.

Outlook

Traders now await key US data, including ADP employment and ISM PMI, for signals on economic direction and policy trajectory. Analysts expect gold to remain range-bound in the near term, with silver tracking similar trends amid global macro uncertainty.