Mumbai, Oct 30 (IANS) Gold and silver prices opened sharply lower on Thursday on the Multi Commodity Exchange (MCX) after the US Federal Reserve announced a 25-basis points rate cut.

The decline in precious metal prices came as investors assessed the Fed’s cautious stance on future rate cuts. Gold futures on the MCX opened 1.27 per cent lower at Rs 1,19,125 per 10 grams, compared to the previous close of Rs 1,20,666.

Silver prices also dropped, opening 0.4 per cent lower at Rs 1,45,498 per kilogram, against the previous close of Rs 1,46,081. By 9:42 AM, gold prices had extended losses and were trading lower by Rs 1,827, or 1.51 per cent, at Rs 1,18,839 per 10 grams.

Silver, too, was down by Rs 1,411, or 0.97 per cent, at Rs 1,44,670 per kilogram. In the international market, gold prices inched slightly higher, supported by a modest decline in the US dollar.

Spot gold rose 0.2 per cent to $3,937.88 per ounce, while US gold futures for December delivery slipped 1.2 per cent to $3,950.70 per ounce.

The dollar index fell 0.2 per cent after touching a two-week high in the previous session, making gold relatively cheaper for investors holding other currencies.

On Wednesday, the US Federal Reserve announced its second interest rate cut of the year, reducing the benchmark rate to a range of 3.75 per cent to 4.00 per cent.

However, Fed Chair Jerome Powell struck a cautious tone, saying that officials were divided on the future course of monetary policy and that another rate cut later this year was “far from certain.”

Globally, investors are also keeping an eye on developments between the US and China, as market participants await potential trade deal discussions between US President Donald Trump and Chinese President Xi Jinping.

“The Fed Chair’s cautious tone on further easing triggered profit-taking. Additionally, optimism over upcoming US-China trade talks, where Presidents Trump and Xi may finalise a deal, reduced safe-haven demand,” experts said.

“Governor Powell said officials are struggling to reach a consensus about what lies ahead for monetary policy and that financial markets should not assume another rate cut will happen at the end of the year,” they added.

–IANS

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