Gold and silver prices have come under pressure ahead of the Federal Reserve meeting scheduled for later this month. During the current week, the price of 24-carat gold has declined by around ₹3,500 per 10 grams. Silver has also weakened, with its price falling by approximately ₹5,000 per kilogram.
The festive season has already begun, and demand for gold usually increases during this period. However, gold prices have moved lower just before Dussehra and Diwali. The price of 24-carat gold has dropped by nearly ₹3,500 per 10 grams this week, while 22-carat jewellery gold has become cheaper by around ₹3,200.
For consumers planning to purchase jewellery during the festive season, the decline in gold prices could provide some relief. Silver has also remained under pressure. On October 1, the price of one kilogram of silver fell sharply by ₹5,000, reportedly amid weakness in industrial demand.
Why Are Gold and Silver Prices Falling?
Despite the seasonal demand for precious metals, both domestic and international bullion markets have remained under pressure. One of the major factors influencing investor sentiment is the upcoming monetary policy meeting of the US Federal Reserve.
The bullion market is closely watching the Federal Reserve meeting scheduled for October 28. Uncertainty surrounding interest rates has made institutional investors more cautious. This has also increased profit booking in gold, putting additional pressure on prices.
Gold Rate Today
In Delhi, Lucknow and Jaipur, 24-carat gold is priced at around ₹1,49,330 per 10 grams. The price of 22-carat gold is approximately ₹1,36,900, while 18-carat gold is available at around ₹1,12,040 per 10 grams.
In Mumbai, Kolkata, Bengaluru and Hyderabad, the rate of 24-carat gold is around ₹1,49,180 per 10 grams. Meanwhile, 22-carat gold is priced at approximately ₹1,36,750 and 18-carat gold at around ₹1,11,890 per 10 grams.
In Patna and Ahmedabad, 24-carat gold is trading near ₹1,49,230 per 10 grams. The price of 22-carat gold is around ₹1,36,800, while 18-carat gold is priced at approximately ₹1,11,940 per 10 grams.
US Federal Reserve and Interest Rate Outlook
A few days ago, market expectations suggested that Fed Chairman Kevin Warsh could raise policy interest rates for a second consecutive time on October 28. At the beginning of the week, the probability of a rate hike was estimated at nearly 70%.
However, after recent US inflation data came in below expectations, the likelihood of another rate increase has reportedly fallen to around 22%.
According to market analysts, if the Federal Reserve decides to keep interest rates unchanged, some of the pressure on gold prices could ease. However, the future movement of gold and silver will also depend on inflation data, the US dollar, global economic conditions and overall investor sentiment.
Note: Gold and silver prices can vary depending on the city, purity, taxes, making charges and the jeweller.