Gold records third weekly loss amid fading hopes of US Fed rate cut

Gold prices fell for a third consecutive week, pressured by a stronger dollar and fading hopes of a US Fed rate cut. Global economic uncertainty, eased US–China trade tensions, and changes in China’s gold retail policies also impacted bullion demand.

Mumbai: The price of 24-carat gold (10 grams) dipped by Rs 670 over the week, impacted by a stronger dollar and reduced expectations for another US Federal Reserve rate cut.

The price of 10 grams of 24-carat gold closed the week at Rs 1,20,100 down from Rs 1,20,770 last week, according to data published by the India Bullion and Jewellers Association (IBJA).

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International bullion remained around $4,000 for the week, facing pressure following Fed Chair Jerome Powell’s hawkish remarks, even as the US Fed delivered a second 25 bps cut this year.

Market expectations for another cut in December slipped from around 90 per cent to near 60 per cent, pressuring bullion, while the dollar index held close to 100 and USD/INR climbed toward 89.

Analysts said that the longest US government shutdown on record has delayed official data, increasing reliance on private surveys. ISM manufacturing and services PMIs fell below 50, indicating contraction, while private payrolls rose by 42,000, complicating the Federal Reserve’s outlook.

Meanwhile, US–China trade tensions eased after US President Donald Trump and Chinese President Xi Jinping agreed to tariff trimming in exchange for Beijing’s fentanyl curbs, renewed soybean buying, and continued rare-earth exports, muting safe-haven demand.

“China removed a core VAT offset for gold retailers buying via the Shanghai Gold Exchange and cut exemptions from 13 per cent to 6 per cent on some purchases, prompting banks to halt new retail accounts and potentially cooling physical demand in the world’s top consumer,” said Manav Modi, Analyst – Precious Metal-Research, Motilal Oswal Financial Services Ltd.

Fed liquidity support of roughly $29.4 billion alongside the December end of QT highlights ongoing funding stress, he added.

Adding a structural tailwind, the US added uranium, copper, and silver to its critical minerals list, potentially bolstering long-term demand for precious and industrial metals.