Why Did Gold Prices Drop 1% on MCX Today?
Click to start listening
Synopsis
In a significant turn of events, gold prices have fallen 1% on the MCX following diminishing hopes for a US Federal Reserve rate cut. This shift comes amid a stronger dollar and easing geopolitical tensions, leading investors to reevaluate their positions. Stay tuned to learn more about the implications for the gold market.
Key Takeaways
- Gold prices dropped 1% on MCX amid fading rate cut hopes.
- Stronger US dollar adds pressure on gold.
- Silver prices also followed suit with a 0.61% decline.
- Analysts suggest caution for investors.
- Potential for volatility remains high.
Mumbai, Nov 24 (NationPress) Gold prices experienced a notable decline on Monday, driven by diminishing expectations of a rate cut from the US Federal Reserve and a reduction in geopolitical tensions that impacted investor confidence.
A robust US dollar further exerted downward pressure on the precious metal.
On the Multi Commodity Exchange (MCX), gold futures for December plunged by 1 percent to Rs 1,22,950 per 10 grams.
Silver mirrored this downward trend, with December futures decreasing by 0.61 percent to Rs 1,53,209 per kg during early trading.
According to analysts, gold has support at Rs 1,23,450-1,22,480 while facing resistance at Rs 1,24,750-1,25,500.
They also noted that silver supports lie at Rs 1,53,050-1,52,350 with resistance at Rs 1,55,140 and Rs 1,55,980.
Currently, analysts observe that gold lacks a significant positive catalyst to uphold its earlier gains.
The recent data from the US job market has diminished the likelihood of a 25-basis-point rate cut by the Federal Reserve in December, contributing to the price correction.
This strong economic data has propelled the US dollar index to nearly a six-month high as of Friday.
On Monday, the index remained above the 100 mark, making gold pricier for holders of other currencies and suppressing demand.
Additionally, the easing of geopolitical concerns has diminished gold’s allure as a safe-haven asset.
Experts suggest that the interplay between a stronger dollar, uncertainties over US tariff policies, developments in the Russia-Ukraine conflict, and the upcoming Fed policy announcement could keep gold prices fluctuating in the near future.
Some market analysts anticipate further corrections and advise investors to exercise caution before making new purchases.
Gold is making an effort to regain momentum as prices hover near $4,100, driven by rising expectations for a December Fed rate cut, which now stands at 71 percent probability following dovish remarks from officials such as Miran and Williams.
“The bullion market has shown volatility over the last three sessions, reflecting traders’ uncertainty. However, with increasing rate-cut expectations and persistent geopolitical risks, dips in gold prices are likely to attract renewed buying interest in the upcoming week, with the next resistance around 125000 and support near 122000,” analysts concluded.
Point of View
Our stance remains with the nation first. The recent fluctuations in gold prices highlight the intricate relationship between economic indicators and market sentiment. While the decline may seem concerning, it is essential for investors to remain informed and cautious in these volatile times.
NationPress
24/11/2025
Frequently Asked Questions
What caused the drop in gold prices?
The drop in gold prices was primarily due to reduced expectations of a US Federal Reserve rate cut and a stronger dollar, which has made gold more expensive for foreign investors.
What are the current support and resistance levels for gold?
Gold currently has support levels at Rs 1,23,450-1,22,480 and resistance levels at Rs 1,24,750-1,25,500.
How does the US dollar impact gold prices?
A stronger US dollar typically makes gold more expensive for buyers using other currencies, leading to decreased demand and lower prices.
What should investors do in this market?
Investors are advised to remain cautious and consider waiting for clearer signals before making new purchases, as market conditions remain volatile.
What is the outlook for gold prices in the near future?
The outlook remains uncertain, with potential volatility influenced by upcoming Fed policy announcements and geopolitical developments.
