Why gold, silver prices are consolidating after recent gains

Gold prices slipped on Wednesday (November 12), weighed down by a rebound in the US dollar and profit-booking after the metal touched a near three-week high in the previous session. The decline follows a strong rally fuelled by expectations that the US Federal Reserve could begin cutting interest rates as early as next month.

In India, 24-karat gold was priced at ₹12,551 per gram, 22-karat gold at ₹11,505, and 18-karat gold at ₹9,413, according to the India Bullion & Jewellers Association.

Silver traded at ₹160.10 per gram, or ₹1.60 lakh per kilogram

Globally, spot gold fell 0.5% to $4,107.41 per ounce as of 04:21 GMT, while US gold futures edged 0.1% lower to $4,113.80 an ounce.

Despite the minor dip, the metal remains comfortably above the $4,100 an ounce mark after Tuesday’s (November 11's) high, the strongest since October 23.

“The dip in the dollar had suited gold and silver earlier this week, but with the dollar index recovering, some profit-taking was inevitable,” said Tim Waterer, Chief Market Analyst, KCM Trade. “Gold appears to have resumed normal trading, staying above $4,100 while looking for higher targets if US data continues to support the case for rate cuts.”

The US dollar index rose 0.1% on Wednesday (November 12), snapping a five-session losing streak and making bullion slightly less attractive for holders of other currencies. Meanwhile, optimism around the end of the US government shutdown and firmer equity markets have trimmed some of the safe-haven demand that supported gold earlier this month.

According to CME Group’s FedWatch Tool, traders are pricing in a 68% probability of a 25-basis-point rate cut at the Federal Reserve’s December meeting, up from 64% in the previous session.

Fed Governor Stephen Miran has also hinted that a 50-bps cut could be warranted, citing easing inflation and rising unemployment.

Non-yielding gold typically benefits from a low interest rate environment and heightened economic uncertainty. The reopening of the US government, following a record-long shutdown, is expected to release delayed economic data that could influence the Fed’s next move.

Back home, Aksha Kamboj, Vice President of the India Bullion & Jewellers Association (IBJA), noted that steady investor interest continues to support domestic gold prices.

“With easing concerns around the US shutdown and the possibility of a Fed rate cut, gold remains attractive. The ongoing wedding season is also adding to demand,” she said.

Rahul Kalantri, VP–Commodities at Mehta Equities, said gold and silver remain volatile, alternating between gains and profit-taking. “Gold eased from its recent high as shutdown concerns faded and equities recovered, but both metals are holding comfortably above support levels,” he said.

According to Augmont Bullion, gold has support at $4,000 an ounce and resistance near $4,200 per ounce, while in India, the metal faces resistance around ₹1.26 lakh per 10 gm. Silver’s technical range stands between $48–$51 per ounce internationally and ₹1.49 lakh–₹1.56 lakh per kg domestically.

While short-term corrections may continue, analysts expect bullion to remain supported in the near term by expectations of monetary easing and steady physical demand in India’s festive and wedding season.

-With Reuters inputs