Gold futures sink as dollar rally intensifies

Gold futures fell sharply on Wednesday, hitting a three-month low as a stronger US dollar and rising expectations of higher US interest rates weakened demand for bullion.

  On the MCX, gold futures dropped by ₹1,834, or 1.25%, to ₹1,44,695 per 10 grams, with a turnover of 9,508 lots. This marks the lowest closing level for domestic gold futures since March 23, when the metal settled at ₹1,45,069 per 10 grams.

 Analysts said bullion remained under pressure as traders increasingly factored in a tighter US monetary policy outlook. Higher interest rates typically reduce the appeal of non-yielding assets such as gold, while also supporting the US dollar.

  According to Gaurav Garg, gold prices weakened in the domestic market due to the strengthening dollar and concerns over the US Federal Reserve’s policy stance, which have dampened investor appetite for precious metals.

  In global markets, gold futures also declined sharply. On COMEX, gold slipped $51.55, or 1.24%, to $4,097.85 per ounce, falling below the $4,100 mark for the first time in nearly eight months. Market experts said multiple global factors have accelerated the selloff.  Renisha Chainani noted that a broad risk-off sentiment triggered by weakness in AI-linked stocks, combined with hawkish Federal Reserve signals, has intensified pressure on bullion.

   The dollar index has climbed above the 101 level, adding further pressure on gold prices.  

  Meanwhile, lingering uncertainty over the US-Iran understanding continues to keep markets cautious.  Investors are now closely watching upcoming US Personal Consumption Expenditures data, the Federal Reserve’s preferred inflation gauge, for fresh signals on interest rates and bullion direction.

—Agencies