Gold Futures Extend Decline To ₹1.5 Lakh Per 10 Grams, Firm US Dollar Dulls The Shine Of Bullion

Mumbai: Gold futures fell for a fourth consecutive session on Thursday, September 24, as a stronger US dollar, rising Treasury yields and weakness in global bullion prices weighed on the metal.

On the Multi Commodity Exchange (MCX), October gold futures declined ₹833, or 0.55%, to ₹1,50,466 per 10 grams. The drop brought prices close to the ₹1.5 lakh mark.

Why Are Gold Prices Falling?

Aamir Makda, Commodity and Currency Analyst at Choice Broking, attributed the continued decline in MCX gold to the stronger dollar and higher US Treasury yields.

Stronger-than-expected US private sector employment data has raised concerns that inflation may remain difficult to contain. It has also strengthened expectations of further interest rate increases by the US Federal Reserve, according to Makda.

Higher yields can make gold less appealing to investors because the precious metal does not pay interest. A firmer dollar can also make dollar-priced bullion costlier for buyers using other currencies.

Global Gold Futures Near $4,300

In New York, December Comex gold futures slipped $17.93, or 0.42%, to $4,300.47 an ounce.

Ashish Rajodiya, Head of Commodities at PL Capital, said gold remained near $4,300 after a sharp fall in the previous session. He pointed to a dollar index around 101, its highest in nearly two months, and a US 10-year Treasury yield approaching 5.11%.

The yield level would be its highest since July 2007, he said. Those moves have put the outlook for US interest rates at the centre of bullion trading.

What Could Move Gold Next?

Investors are also watching geopolitical developments. Iranian President Masoud Pezeshkian warned in his UN General Assembly address that Tehran would restrict navigation through the Strait of Hormuz while sanctions remain.

Rajodiya said another strong US economic reading could push gold towards $4,200 an ounce. Signs of a cooling labour market or renewed tensions in the Gulf could, however, revive demand for the metal.