Why Are Gold and Silver Prices Declining Ahead of Key US Inflation Data?
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Synopsis
Discover the latest insights on the dip in gold and silver prices as investors brace for pivotal US inflation data. With a significant drop in gold’s value, market analysts weigh in on the implications and what lies ahead for precious metals amid economic uncertainty.
Key Takeaways
- Gold prices fell on the MCX as investors await US inflation data.
- MCX Gold December futures dropped 0.44 percent.
- MCX Silver December contracts decreased 0.98 percent.
- Gold is on track to end its nine-week winning streak.
- Market focus shifts to US CPI report and trade talks.
Mumbai, Oct 24 (NationPress) On Friday morning, gold prices tumbled on the Multi Commodity Exchange (MCX), as traders eagerly anticipated critical US inflation statistics set to be released later today.
The December futures for MCX Gold saw a decrease of 0.44 percent to reach Rs 1,23,552 per 10 grams, while MCX Silver December contracts fell by 0.98 percent to Rs 1,47,052 per kilogram.
Analysts noted that gold is poised to end its nine-week winning streak due to significant selling pressure that has pushed the precious metal down from its record highs.
"This decline is attributed to investors securing profits amid inflated valuations, a resurgence of optimism regarding a potential US-China trade agreement, and a stronger US dollar," they explained.
"Looking forward, market participants will concentrate on the impending release of US CPI data, updates concerning the US government shutdown, and next week’s discussions between US President Donald Trump and Chinese President Xi Jinping," analysts remarked.
Earlier in the week, gold experienced its most substantial intraday drop in five years, plummeting more than 5 percent within a single session.
Despite this recent downturn, gold prices have surged over 50 percent this year, largely bolstered by global trade friction.
Market sentiment is now directed towards the upcoming trade negotiations between US President Donald Trump and Chinese President Xi Jinping next week.
In global markets, spot gold fell 0.2 percent to $4,118.68 per ounce at 3:15 am GMT, marking its first weekly decrease in ten weeks.
Gold has dropped approximately 3 percent this week, on track for its largest weekly loss since mid-May.
A stronger US dollar has also impacted gold prices, making it pricier for investors holding other currencies. The dollar index has risen for the third consecutive session.
Market focus is now on the US Consumer Price Index (CPI) report, which is anticipated to reveal that core inflation remained steady at 3.1 percent in September.
This report's release was postponed earlier due to a temporary government shutdown.
Investors are also considering a probable 25-basis-point interest rate reduction by the US Federal Reserve next week.
Lower interest rates typically enhance gold prices, as they diminish the opportunity cost of holding this non-yielding asset.
Point of View
It is essential to remain informed about the fluctuations in gold and silver prices. As these commodities are sensitive to global economic indicators, understanding the underlying factors can aid investors in making informed decisions. Our commitment is to provide timely updates and insights that keep our audience ahead in the market.
NationPress
24/10/2025
Frequently Asked Questions
Why are gold prices falling?
Gold prices are declining due to profit-taking by investors, a stronger US dollar, and renewed optimism about a potential US-China trade deal.
What impact does the US CPI report have on gold prices?
The US CPI report provides insights into inflation trends, and expectations of stable inflation can influence gold prices, as lower interest rates typically boost demand for gold.
How much have gold prices increased this year?
Despite recent declines, gold prices have surged over 50 percent this year, primarily driven by global trade tensions.
