Gold falls Rs 600 to Rs 1,31,600/10g on muted global trends, rate-cut jitters

New Delhi: Gold prices fell by Rs 600 to Rs 1,31,600 per 10 grams in the national capital on Thursday, following weak global trends and investor caution ahead of the US Federal Reserve's policy meeting next week.

The precious metal of 99.9 per cent purity had closed at Rs 1,32,200 per 10 grams on Wednesday.

Silver extended its losses for the second straight day, depreciating by Rs 900 to Rs 1,80,000 per kilogram (inclusive of all taxes) from the previous close of Rs 1,80,900 per kg.

"Gold prices retreated on Thursday amid a lack of follow-up buying and a cautious tone among market participants ahead of next week's Federal Open Market Committee policy decision," Saumil Gandhi, Senior Analyst - Commodities at HDFC Securities, said.

Globally, spot gold slipped by 0.15 per cent to USD 4,197.10 per ounce.

"Spot gold is currently trading around at USD 4,193 as mixed US data are leading to further consolidation," Praveen Singh, Research Analyst, Mirae Asset ShareKhan, said.

He noted that the latest US ADP employment report showed that payrolls in November declined, which is the worst data since 2023, raising the bets on a potential rate cut by the Federal Reserve.

In addition, spot silver was trading 2 per cent lower at USD 57.34 per ounce in the overseas market.

Silver eased to around USD 57.2 per ounce as markets are awaiting US jobless claims and Challenger layoffs later in the day," Kaynat Chainwala, AVP Commodity Research, Kotak Securities, said.

However, softening labour trends, cooling growth, strong central-bank demand, and expectations of a Fed cut continue to support the near-term outlook, she added.

Silver had hit a record of USD 58.97 per ounce in the global markets on Wednesday.

Renisha Chainani, Head - Research at Augmont, said, silver remains at record highs, as investors gain confidence in a Federal Reserve rate cut next week and exchange traded fund (ETF) inflows continue.

Chainani noted that silver-backed ETFs added almost 200 tons on Tuesday, bringing overall holdings to their highest level since 2022 due to strong demand.

"Silver has risen 100 per cent this year due to concerns about market liquidity, following outflows to US and Chinese inventory, inclusion on the US vital minerals list, and a structural supply deficit," she said.