Gold futures for October delivery fell ₹208, or 0.13%, to ₹1.54 lakh per 10 grams. The contract saw a business turnover of 2,452 lots.
Analysts attributed the decline in gold prices to weaker spot demand.
In the international market, gold futures fell 0.12% to $4,432.26 per ounce in New York.
What is driving gold prices?
Gaurav Garg, Head of Research at Lemonn, said gold slipped after a sharp correction over the past two sessions as markets assessed the Federal Reserve’s policy outlook.
According to Garg, safe-haven demand and movements in the dollar are providing some support to gold, while silver has also come under pressure following its recent rally.
Markets are now watching US economic data, including the ADP employment report and Friday’s Non-Farm Payrolls data, for clues on the Federal Reserve’s September policy decision. Stronger labour-market data could push up yields and the dollar, potentially weighing on gold, while weaker data could revive expectations of monetary easing and support precious metals.
Silver prices rise on fresh positions
Silver futures moved in the opposite direction. The December contract rose ₹456, or 0.19%, to ₹2.40 lakh per kg on the MCX, with a business turnover of 2,655 lots.
Analysts said fresh position build-up by market participants supported silver prices.
Globally, however, silver futures declined 0.17% to $66.46 per ounce.
Gold, silver outlook
The precious metals market enters September after a correction towards the end of August.
Darshan Desai, CEO of Aspect Bullion & Refinery, said gold had come under pressure from a stronger dollar, changing expectations around US interest rates and profit-booking after its strong performance in August.
He said the correction could lead to renewed physical buying in India, particularly ahead of the festive season.
Market volatility could remain elevated this week, with US employment data, signals from the US Federal Reserve and geopolitical developments likely to influence bullion prices.
Desai said the medium-term outlook for gold and silver remained constructive, citing continued investor interest and physical demand.
-With agencies inputs
