Gold and silver prices witnessed a dip on Tuesday, October 17, 2023, amid diplomatic efforts to stifle the ongoing conflict in the Middle East. The precious metals also faced pressure from a stronger U.S. dollar and higher Treasury yields, ahead of economic data and Federal Reserve Chair Jerome Powell’s speech this week, which could steer upcoming interest rate decisions.
Gold prices fall on MCX and in global markets
On the Multi Commodity Exchange (MCX), gold futures for December delivery were trading at Rs 59,065 per 10 grams, down by Rs 101 or 0.17 percent from the previous close of Rs 59,166. The yellow metal had gained over 4 percent in the previous week, as geopolitical tensions and inflation concerns boosted its safe-haven appeal.
In the international market, spot gold dipped 0.3 percent to $1,913.97 per ounce by 0326 GMT, while U.S. gold futures fell 0.4 percent to $1,925.80. The U.S. dollar index rose 0.2 percent against a basket of currencies, making gold more expensive for holders of other currencies. The U.S. Treasury yields also climbed, increasing the opportunity cost of holding non-interest-bearing gold.
Silver prices remain steady on MCX and in global markets
On the MCX, silver futures for December delivery were trading at Rs 70,777 per kg, down by Rs 260 or 0.37 percent from the previous close of Rs 71,037. The white metal had also gained over 4 per cent in the previous week, tracking gold and industrial demand.
In the international market, spot silver eased 0.7 percent to $22.44 per ounce by 0326 GMT. Silver is often used as an industrial metal in various sectors such as electronics, solar panels, and medical equipment.
Factors influencing gold and silver prices
The main factors that are influencing the gold and silver prices are:
- The geopolitical situation in the Middle East: The ongoing conflict between Israel and Iran has raised fears of a wider war in the region, which could disrupt oil supplies and global stability. Gold and silver are seen as safe-haven assets that can hedge against geopolitical risks and currency devaluation.
- The inflation outlook: The rising consumer prices in the U.S. and other major economies have raised concerns about inflationary pressures and their impact on economic growth and monetary policy. Gold and silver are considered as inflation hedges that can preserve purchasing power and wealth.
- The U.S. economic data and Fed policy: The U.S. retail sales, industrial production, NAHB housing market index, and Fed Chair Powell’s speech are some of the key economic events that could influence the gold and silver prices this week. The data could provide clues on the strength of the U.S. recovery and the Fed’s tapering timeline. A stronger U.S. economy and a hawkish Fed could boost the U.S. dollar and Treasury yields, weighing on gold and silver prices.
- The festive season demand: The festive season in India, which is one of the largest consumers of gold and silver in the world, has started. The demand for jewelry and coins could increase during this period, supporting the prices of gold and silver.
City-wise gold and silver prices in India
The following table shows the indicative spot prices of gold (per 10 grams) and silver (per kg) in some of the major Indian cities as of October 17, 2023:
| City | Gold (24k) | Silver |
|---|---|---|
| New Delhi | Rs 55,100 | Rs 73,600 |
| Mumbai | Rs 54,950 | Rs 73,600 |
| Kolkata | Rs 54,950 | Rs 73,600 |
| Chennai | Rs 55,150 | Rs 77,000 |
Please note that these rates do not include GST, TCS, and other levies.
Conclusion
Gold and silver prices dipped on Tuesday amid diplomatic efforts to stifle the Middle East conflict and stronger U.S. dollar and Treasury yields. However, the precious metals could find support from inflation concerns, festive season demand, and central bank buying in the coming days.
This post Gold Dips, Silver Holds Steady: Your Daily Market Update! was originally published at Finance Crave
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