Gold slips to Rs 1,21,290/10g as US-China truce temper safe haven demand

New Delhi: Gold prices fell by Rs 218 to Rs 1,21,290 per 10 grams on Friday in a volatile movement in futures trade, as investors assessed the impact of the Federal Reserve's cautious stance on rate cuts and a temporary truce in US-China trade tensions.

On the Multi Commodity Exchange (MCX), the yellow metal futures for December delivery declined by Rs 218, or 0.18 per cent, to Rs 1,21,290 per 10 grams in a business turnover of 13,223 lots.

Similarly, silver futures for December delivery decreased by Rs 410, or 0.28 per cent to Rs 1,48,430 per kilogram in 20,217 lots on the MCX.

In the international market, Comex gold futures for December delivery were trading marginally higher at USD 4,020.67 per ounce, while silver slipped 0.37 per cent to USD 48.43 an ounce.

"Gold prices were trading around USD 4,020 per ounce on Friday, set for a second straight weekly loss, pressured by fading expectations of Federal Reserve rate cuts and a US-China trade deal," Jigar Trivedi, Senior Research Analyst at Reliance Securities, said.

Trivedi added that US and China had reached a trade truce with a one-year deal on rare earths and critical minerals, as President Donald Trump cut fentanyl tariffs to 10 per cent and Beijing agreed to curb production and resume US soybean purchases.

"Still, some uncertainty remains over the durability of the deal," he said.

Meanwhile, Federal Reserve Chair Jerome Powell said another rate cut in December is not assured, keeping the US dollar near a three-month high. The stronger dollar made gold costlier for foreign buyers.

Despite the day's decline, the yellow metal remained on track for a monthly gain and has risen nearly 50 per cent so far this year, supported by strong central bank demand, Trivedi noted.

According to the World Gold Council (WGC), global central banks purchased 220 tonnes of gold in the third quarter of 2025, marking a 28 per cent increase from the previous quarter. Kazakhstan led the buying spree, while Brazil made its first purchase in over four years.

However, India's gold demand fell 16 per cent by volume in the July-September quarter of 2025 as record-high prices dampened consumer appetite, though investment buying surged on safe-haven appeal, the industry body said on Thursday.

The total gold demand declined to 209.4 tonnes in the third quarter from 248.3 tonnes a year earlier, it added.

Gold jewellery demand, which accounts for the bulk of consumption in the world's second-largest bullion market, dropped 31 per cent to 117.7 tonnes from 171.6 tonnes. But the value of jewellery purchases remained flat at around Rs 1,14,270 crore as buyers adjusted to elevated price levels.

Investment demand showed "remarkable strength", rising 20 per cent by volume to 91.6 tonnes and surging 74 per cent in value terms to Rs 88,970 crore from Rs 51,080 crore, the WGC said.

"This highlights a deepening strategic commitment among Indian consumers to gold as a long-term store of value," Sachin Jain, World Gold Council Regional CEO for India, said.