Mumbai: Gold prices edged lower on Friday as a stronger us dollar outweighed the impact of softer inflation data from the United States, keeping global bullion markets cautious even as weekly trends remained positive.
International spot gold eased slightly after data showed us consumer inflation cooled more than expected in November. The softer inflation reading strengthened expectations that the Federal Reserve may consider interest rate cuts in the coming months, a factor that usually supports gold prices.
However, gains were limited as the dollar index firmed and hovered near recent highs. A stronger dollar makes gold more expensive for buyers holding other currencies, reducing demand in overseas markets and putting pressure on prices.
Market analysts said the decline was modest and appeared more like a pause rather than a reversal. Despite the dip, gold remained on track for a weekly gain, supported by ongoing expectations of easier us monetary policy and steady safe haven demand.
Other precious metals showed mixed movement. Silver continued to outperform gold, trading close to multi year highs on strong industrial demand and investor interest. Platinum and palladium were largely steady as traders awaited clearer signals from global economic data.
In India, domestic gold prices also softened slightly in line with global trends. Dealers said the pullback could offer some relief to buyers, though overall prices remain elevated due to currency movements and import costs.
Looking ahead, traders are closely watching signals from the us central bank and movements in the dollar. Analysts say that sustained expectations of rate cuts could support gold in the medium term, while any renewed strength in the dollar may keep prices under pressure in the near term.
For now, gold markets remain balanced between hopes of looser monetary policy and the restraining influence of a firm dollar, with investors staying cautious as the year draws to a close.