Gold prices see sharp cuts as markets watch out for Trump’s economic policies. The decline was seen for the December 5, 2024 expiry trade, which is almost a reduction of Rs 543 per 10 gram. The US federal reserve on Thursday did the second rate cut for the year of 0.25 percentage points. The cut in fed rates usually makes Gold as a safe investment but there can be seen a decline in the gold prices majorly due to strong dollar and rising treasury yields.
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Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities said, “Strengthening dollar index is exerting pressure on the yellow metal. The rise in US bond prices following Trump’s election victory is contributing to the corrective trend in bullion. This trend is likely to persist as long as gold trades below the critical $2,750 resistance level. On COMEX, $2,600 serves as a significant support, while in MCX, the range of ₹74,500-75,000 is expected to provide overall support.”
Donald Trump known for not being in favour of aggressive interest rate cuts , as it could be a catalyst for rising inflation is an important cue for gold rates globally.
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Kaynat Chainwala, AVP-Commodity Research, Kotak Securities said ,”COMEX Gold prices fell to a one-month low of $2,650.30 per ounce last week, as investor sentiment shifted toward risk assets following Trump’s election victory and the Republican Party’s successful bid to regain control of the US Senate. Gold briefly rebounded above $2,700 after the Federal Reserve’s widely anticipated 25-basis point rate cut. However, stronger dollar and rising Treasury yields kept gold under pressure, and it closed the week down 2% at $2,694.80 per ounce.”
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