Gold and silver prices dropped sharply this week as global bullion markets weakened. Rising optimism over a potential US-China trade deal and a strong US dollar reduced safe-haven demand for precious metals.
Gold Market Update
On the Multi Commodity Exchange (MCX), gold futures for December delivery fell by Rs 1,546 (1.25%), closing at Rs 1,21,905 per 10 grams in a turnover of 12,428 lots.
During the holiday-shortened week, gold lost Rs 3,557 (2.80%), reflecting continued pressure on prices.
Darshan Desai, CEO of Aspect Bullion & Refinery, said:
“Gold prices continue to decline as safe-haven demand weakens amid optimism on a US-China trade deal and a stronger dollar.”
The US Dollar Index, which measures the greenback against six major currencies, rose slightly by 0.03% to 98.98, further weighing on gold demand.
Internationally, COMEX gold futures for December delivery fell by USD 61.69 (1.49%), closing at USD 4,076.11 per ounce.
Jigar Trivedi, Senior Research Analyst at Reliance Securities, noted:
“Gold dropped to around USD 4,070 per ounce, extending Friday’s losses, as progress in US-China trade talks reduced demand for safe-haven assets.”
Silver Market Performance
Silver also suffered sharp losses on the MCX. December delivery futures dropped by Rs 1,964 (1.33%), settling at Rs 1,45,506 per kilogram in 20,367 lots.
Over the past week, silver fell by Rs 9,134 (5.83%), reflecting global market uncertainty.
In international markets, COMEX silver futures for December delivery declined 1.44%, closing at USD 47.88 per ounce.
US-China Trade Talks Influence
The decline in precious metals comes after two days of negotiations in Malaysia between top officials from Washington and Beijing. A preliminary consensus was reached on key issues including export controls, fentanyl trade, agriculture, and shipping levies.
The deal is expected to be finalized when US President Donald Trump meets Chinese President Xi Jinping in South Korea later this week.
Expert Advice for Investors
Darshan Desai advises investors to be prepared for short-term volatility in gold prices. Positive developments in the trade deal or further strength in the US dollar may trigger profit-taking in gold.
Jigar Trivedi added that traders are also watching major central bank decisions, including:
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Federal Reserve expected to cut rates by 25 basis points
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European Central Bank and Bank of Japan likely to maintain current rates
Key Takeaways
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Gold and silver prices fell sharply due to reduced safe-haven demand
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US-China trade optimism and a strong dollar are main drivers
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Investors should expect short-term volatility and possible price swings
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Central bank actions this week could impact the precious metals market
