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What is the story about?
Gold and silver prices declined on Tuesday (July 28), tracking weakness in global bullion markets as investors turned cautious ahead of the US Federal Reserve’s monetary policy decision due on July 29.
On the Multi Commodity Exchange (MCX), gold futures for August delivery fell ₹1,213, or 0.85%, to ₹1.41 lakh per 10 grams. Silver futures for September delivery declined 1.93% to ₹2.16 lakh per kg.
The decline in precious metals followed weakness in international markets. Comex gold futures fell 0.85% to around $4,041.42 per ounce, while spot gold slipped closer to $4,030 an ounce.
Analysts said a stronger US dollar and uncertainty over the Fed’s interest rate outlook weighed on bullion prices. Since gold and silver are traded globally in dollars, a rise in the US currency makes these metals costlier for buyers using other currencies, often reducing demand.
“The weakness in global bullion, coupled with the strengthening rupee, kept MCX Gold under pressure,” said Jateen Trivedi, Vice President Research Analyst - Commodity and Currency, LKP Securities.
Why is the Fed decision important for gold and silver?
The Federal Reserve’s policy decision is expected to be a key trigger for precious metal prices. Higher interest rates generally weigh on gold and silver as they increase the opportunity cost of holding non-yielding assets, while expectations of rate cuts tend to support bullion.
“Investors remain cautious ahead of the US Federal Reserve's policy decision, which is expected to be the key catalyst for the next directional move in bullion prices,” Trivedi said.
Market participants are also tracking rate expectations. A more accommodative stance from the Fed could provide support to precious metals, while a stronger-than-expected policy signal may keep prices under pressure.
Dollar strength keeps bullion under pressure
The US dollar index climbed to a one-month high of 101.57, putting pressure on precious metals.
According to Kaynat Chainwala, AVP Commodity Research, Kotak Securities, spot gold and silver declined to around $4,030 and $57, respectively, as the dollar strengthened ahead of the Fed decision.
“A firmer dollar continues to weigh directly on bullion,” she said, adding that uncertainty over the US-Iran situation also kept investors cautious.
What is supporting gold prices?
Despite the recent decline, analysts said the broader outlook for gold remains supported by steady investment and physical demand.
Pinky Yadav, Commodity Fundamental Analyst at Choice Broking, said gold losses were partly limited after US President Donald Trump indicated that Washington was engaged in “good talks” with Iran, raising hopes of a diplomatic resolution and pushing crude oil prices lower.
She added that demand from China, higher imports, continued investor buying and inflows into bullion-backed exchange-traded funds have supported gold prices.
-With agencies inputs
On the Multi Commodity Exchange (MCX), gold futures for August delivery fell ₹1,213, or 0.85%, to ₹1.41 lakh per 10 grams. Silver futures for September delivery declined 1.93% to ₹2.16 lakh per kg.
The decline in precious metals followed weakness in international markets. Comex gold futures fell 0.85% to around $4,041.42 per ounce, while spot gold slipped closer to $4,030 an ounce.
Analysts said a stronger US dollar and uncertainty over the Fed’s interest rate outlook weighed on bullion prices. Since gold and silver are traded globally in dollars, a rise in the US currency makes these metals costlier for buyers using other currencies, often reducing demand.
“The weakness in global bullion, coupled with the strengthening rupee, kept MCX Gold under pressure,” said Jateen Trivedi, Vice President Research Analyst - Commodity and Currency, LKP Securities.
Why is the Fed decision important for gold and silver?
The Federal Reserve’s policy decision is expected to be a key trigger for precious metal prices. Higher interest rates generally weigh on gold and silver as they increase the opportunity cost of holding non-yielding assets, while expectations of rate cuts tend to support bullion.
“Investors remain cautious ahead of the US Federal Reserve's policy decision, which is expected to be the key catalyst for the next directional move in bullion prices,” Trivedi said.
Market participants are also tracking rate expectations. A more accommodative stance from the Fed could provide support to precious metals, while a stronger-than-expected policy signal may keep prices under pressure.
Dollar strength keeps bullion under pressure
The US dollar index climbed to a one-month high of 101.57, putting pressure on precious metals.
According to Kaynat Chainwala, AVP Commodity Research, Kotak Securities, spot gold and silver declined to around $4,030 and $57, respectively, as the dollar strengthened ahead of the Fed decision.
“A firmer dollar continues to weigh directly on bullion,” she said, adding that uncertainty over the US-Iran situation also kept investors cautious.
What is supporting gold prices?
Despite the recent decline, analysts said the broader outlook for gold remains supported by steady investment and physical demand.
Pinky Yadav, Commodity Fundamental Analyst at Choice Broking, said gold losses were partly limited after US President Donald Trump indicated that Washington was engaged in “good talks” with Iran, raising hopes of a diplomatic resolution and pushing crude oil prices lower.
She added that demand from China, higher imports, continued investor buying and inflows into bullion-backed exchange-traded funds have supported gold prices.
-With agencies inputs
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