Gold, silver futures drop as Fed's cautious tone pulls down rate cut hopes

New Delhi: Gold and silver futures on Monday fell as traders trimmed their positions after remarks from US Federal Reserve officials dampened the expectations of a rate cut in their next meeting.

On the Multi Commodity Exchange (MCX), the yellow metal futures for December delivery plunged by Rs 1,229, 0.99 per cent, to Rs 1,22,332 per 10 grams. The February contract also depreciated by Rs 1,207, or 0.96 per cent, to Rs 1,24,101 per 10 grams.

Gold futures climbed by Rs 2,494, or 2.06 per cent in the previous week.

Meanwhile, silver prices extended their losses for the second consecutive session.

The white metal for December tanked by Rs 1,944, or 1.25 per cent, to Rs 1,54,074 per kilogram while the March 2026 contract tumbled by Rs 1,971, or 1.24 per cent, to Rs 1,56,862 per kg.

Over the past week, silver futures skyrocketed by Rs 8,290, or 5.61 per cent.

"Gold and silver prices experienced a rollercoaster trend last week, slipping from their highs in the last two days after hawkish Fed comments dampened investor sentiment," Rahul Kalantri, Vice President of Commodities, Mehta Equities Ltd, said.

He added that the metals also softened as investors prepared for a busy week of delayed US economic data.

The upcoming non-farm payrolls report is expected to offer crucial insight into the Federal Reserve's policy direction.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.17 per cent higher at 99.46, also weighing on bullion prices.

In the international markets, Comex gold futures for December delivery fell by USD 17.16, or 0.42 per cent, to USD 4,077.04 per ounce. In the past week, it had risen by USD 84.4, or 2.10 per cent.

"Gold prices was trading around USD 4,080 per ounce, after a two-day decline, as investors braced for a flood of delayed US economic data set to be released this week," Jigar Trivedi, Senior Research Analyst at Reliance Securities, said.

He noted that September's non-farm payrolls report, due on Thursday, will be closely watched for insights into the US labour market and the likely path of the Federal Reserve's interest rates.

Market expectations for a December rate cut have diminished following hawkish comments from Fed officials last week, with the probability slipping to 46 per cent from 50 per cent a week earlier.

"So far this year, bullion has surged 55 per cent, on track for its strongest annual gain since 1979, buoyed by robust central bank buying and sustained demand from investors seeking protection against rising fiscal and geopolitical risks," Trivedi added.

Silver futures for December delivery went lower by 0.28 per cent to USD 50.54 per ounce.

According to commodities market experts, traders shift their focus on key US economic data releases, including jobs report and the Federal Reserve's meeting minutes for fresh signals on the interest rate decision.

Investors will also closely watch Federal Reserve Chair Jerome Powell's speech on Wednesday. Along with comments from other Fed officials throughout the week which will drive the gold prices, they added.