Gold Loses 3.6% in Four Days Globally; Indian Market Mirrors Decline Ahead of Key US Data

Globally, gold and silver prices dropped on receding hopes of a rate cut by the US Federal Reserve next month. In the national capital, Delhi, gold prices plunged ₹3,900 to ₹1,25,800 per 10 grams on Tuesday. This precious metal with 99.5 percent purity dipped by ₹3,900 to ₹1,25,200 per 10 grams. Silver prices also remained under pressure, sliding by ₹7,800 to ₹1,56,000 per kg (including all taxes), according to the All India Sarafa Association.

Gold and silver witnessed heavy selling as investors awaited Federal Reserve policy cues from US economic data due this week, dampening expectations of a US interest rate cut.

Augmont's head of research, Renisha Chainani, said the absence of US data for the past six weeks and hawkish comments by several Fed officials have diminished the likelihood of an interest rate cut in December.

Overseas, spot gold fell for the fourth consecutive session to $4,042.32 per ounce. In the past four sessions, the precious metal has fallen by $152.82, or 3.64 percent, from its peak of $4,195.14 per ounce on November 12. Spot silver prices rose 0.57 percent to $50.49 per ounce after a three-day decline.

Praveen Singh, Head of Commodities at Mirae Asset Sharekhan, said spot gold continued to decline for the fourth consecutive day as doubts persisted about a rate cut by the Federal Reserve (Fed) amid hawkish comments from Federal Reserve officials. The probability of a rate cut in December has declined to 41 percent, from 63 percent on November 5.

Saumil Gandhi, Senior Analyst (Commodities) at HDFC Securities, said market participants will closely monitor the Federal Reserve's latest meeting release on Wednesday and the September employment report, due on Thursday, for information on the strength of the US economy. He said the release of the data and the meeting release are expected to provide further clarity on the interest rate outlook and could impact gold prices in the near term.