Gold Loses Shine Amid Strong Dollar and Cautious Fed

Gold prices in the national capital dropped by Rs 600 to Rs 1,13,200 per 10 grams on Thursday, influenced by weak local demand and the strengthening of the US dollar. This comes after the Federal Reserve's cautious policy stance on interest rates further cooled investor appetite for gold.

Analysts note that gold of 99.9% purity previously closed at Rs 1,13,800. Similarly, gold of 99.5% purity decreased by Rs 500 to Rs 1,12,800 per 10 grams, inclusive of taxes. The US Federal Reserve's decision to reduce interest rates by a quarter point, paired with its reserved approach on future policy easing, contributed to the drop in demand.

Despite the fall in gold, silver prices witnessed a recovery, gaining Rs 300 to Rs 1,31,500 per kilogram, following a decrease seen on Wednesday. With a 46.6% surge this year, silver continues its upward trend from Rs 89,700 per kg recorded at the end of 2024. The broader market remains wary of ongoing geopolitical and economic uncertainties impacting the commodities' performance.

(With inputs from agencies.)