Gold edges lower on stronger dollar, Fed minutes weigh on rate-cut hopes

MUMBAI — Gold prices traded slightly lower on the MCX on Thursday morning as a stronger US dollar and fresh signals from the US Federal Reserve weighed on investor sentiment. 

Around 9:45 am, MCX Gold December futures were down 0.23 per cent at Rs 1,22,768 per 10 grams.

In contrast, silver prices moved up, with MCX Silver trading 0.39 per cent higher at Rs 1,55,717 per kg.

"Gold has support at Rs 1,22,200 and Rs 1,21,650 and resistance is at Rs 1,23,800 and Rs 1,24,400 while silver has support at Rs 1,54,000 and Rs 1,52,500 and resistance at Rs 1,56,600 and Rs 1,58,000," experts said.

The US dollar index rose to 100.30 during the session, its highest level in more than two weeks. A stronger dollar typically makes gold costlier for buyers using other currencies, reducing overall demand.

Gold also came under pressure after the minutes of the US Federal Reserve’s October meeting were released on Wednesday.

The minutes suggested that policymakers remain cautious about cutting interest rates too quickly, as doing so could push inflation higher again.

This has lowered market expectations of a possible rate cut in December, adding further pressure on gold prices.

Analysts said that gold prices pared gains  after the release of the Fed’s latest meeting minutes, with market participants keeping an eye on update regarding Japan and economic data points which is again being delayed.

"The Fed meeting minutes revealed a divided Federal Reserve that cut rates last month despite concerns that easing too soon could undermine progress on inflation, which has remained above the 2 per cent target for over four years," market watchers said.

"Governor Powell reinforced cautious tone, stating that a December rate cut is not a “foregone conclusion,” they added.