Gold, silver prices ease as strong dollar weighs; India demand remains steady but cautious

Gold prices fell on Friday (October 31) as the dollar strengthened amid uncertainty over the pace of future US Federal Reserve rate cuts, though the precious metal remained on track for its third consecutive monthly gain.

In global markets, spot gold slipped 0.5% to $4,004 per ounce as of 0240 GMT, while US gold futures for December delivery were steady at $4,016.70 per ounce.

Despite the day’s decline, bullion has gained nearly 3.9% in October, supported by expectations of monetary easing and geopolitical concerns.

In India, 24-karat gold was priced at ₹12,268 per gram, while 22-karat gold stood at ₹11,245 per gram and 18-karat gold at ₹9,201 per gram.

“Gold is currently in a minor correction phase, not a significant downtrend,” said Aksha Kamboj, Vice President, India Bullion & Jewellers Association (IBJA). “The movement reflects investor caution as global markets respond to mixed signals and fluctuations in the dollar index. Buyers in India are becoming more price-sensitive after recent volatility.”

Analysts noted that the dollar index hovered near a three-month high, making gold more expensive for holders of other currencies.

The greenback gained support after Federal Reserve Chair Jerome Powell’s hawkish remarks, which dampened expectations of another rate cut in December. Markets are now pricing in a 74.8% probability of a 25-basis-point cut, down from 91.1% a week ago, according to the CME FedWatch tool.

On Wednesday (October 29), the Fed reduced interest rates by a quarter of a percentage point—the second cut this year—bringing the benchmark rate to 3.75%–4.00%.

“The Fed chairman had his hawkish cap on this week, which didn’t do gold any favours,” said Tim Waterer, Chief Market Analyst at KCM Trade. “The prospect of a December rate cut now looks more uncertain, which has boosted the dollar while complicating gold’s yield outlook.”

Meanwhile, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, reported a 0.42% rise in holdings to 1,040.35 tons on Thursday (October 30).

In the domestic market, silver prices also edged lower, quoted around ₹1.46 lakh per kg, reflecting reduced post-festive demand.

“Manufacturers and investors are cautious, and prices are consolidating. With stable supply and muted demand, a significant rise seems unlikely in the short term,” Kamboj added.

Offering a broader perspective, Colin Shah, Managing Director, Kama Jewelry, said the Fed’s move “creates both opportunity and caution” for gold investors. “While a softer dollar could spur global buying, factors like high import costs and elevated prices will weigh on Indian buyers’ decisions,” he said.