MUMBAI– Gold and silver prices opened sharply lower on Thursday on the Multi Commodity Exchange (MCX) after the U.S. Federal Reserve announced a 25-basis-point interest rate cut.
The decline came as investors weighed the Fed’s cautious outlook on future rate moves. Gold futures on the MCX opened 1.27 percent lower at Rs 1,19,125 per 10 grams, compared to the previous close of Rs 1,20,666.
Silver also slipped, opening 0.4 percent lower at Rs 1,45,498 per kilogram against the previous close of Rs 1,46,081. By 9:42 a.m., gold had extended losses to Rs 1,18,839 per 10 grams, down Rs 1,827 or 1.51 percent, while silver fell Rs 1,411 or 0.97 percent to Rs 1,44,670 per kilogram.
In global markets, gold prices inched slightly higher as the U.S. dollar retreated from a two-week high. Spot gold rose 0.2 percent to $3,937.88 per ounce, while U.S. gold futures for December delivery slipped 1.2 percent to $3,950.70 per ounce. The dollar index fell 0.2 percent, making gold more attractive to investors holding other currencies.
The U.S. Federal Reserve on Wednesday announced its second rate cut of the year, lowering the benchmark rate to a range of 3.75 to 4.00 percent. However, Fed Chair Jerome Powell maintained a cautious tone, saying officials were divided on the path ahead and that another rate cut later this year was “far from certain.”
Analysts said Powell’s comments triggered profit-taking in precious metals and reduced safe-haven demand amid optimism about potential progress in U.S.-China trade negotiations.
“The Fed Chair’s cautious tone on further easing triggered profit-taking. Additionally, optimism over upcoming U.S.-China trade talks, where Presidents Trump and Xi may finalize a deal, reduced safe-haven demand,” experts said.
They added, “Governor Powell noted that officials are struggling to reach consensus on the future course of monetary policy, and financial markets should not assume another rate cut will occur by year-end.” (Source: IANS)
