Gold futures on the MCX fell by close to 1% on Thursday from the previous record high, attributed to profit booking, as geopolitical tensions eased and the dollar strengthened. The MCX gold February futures saw a 0.78% decline to Rs 1,51,665 per 10 grams, while MCX silver March futures dropped by 0.62% to Rs 3,16,509 per kg. In the international futures market, US gold futures hovered around $4,790–$4,800 per troy ounce after hitting a new high above $4,887 earlier in the week on COMEX.
The dip in gold rates is seen as a result of profit-booking amidst reduced tariff concerns, although analysts note a strong overall upward trend. Open interest data in the futures market indicated a decrease in ‘OI level’ to 9870 lots, with prices showing upward momentum. Analysts highlighted a trend of long unwinding by traders without new additions in long positions. Meanwhile, COMEX silver traded steadily near $92–$93 after recently reaching record highs above $95.80.
Analysts pointed out robust industrial demand in sectors like solar, electric vehicles, artificial intelligence, electronics, and safe-haven flows as driving forces behind the rally. The US dollar maintained a stable stance after President Trump assured that tariffs would not be imposed on European countries regarding Greenland. With the dollar index rising to 98.81, gold became slightly pricier for foreign buyers.
During the World Economic Forum in Davos, Trump stated that force would not be used to acquire Greenland, mentioning progress in negotiations with NATO Secretary General Mark Rutte. Market focus also turned to upcoming cues from November Personal Consumption Expenditures (PCE) data, the Fed’s preferred inflation measure, and weekly jobless claims, all scheduled for later in the day. Expectations lean towards the US Federal Reserve keeping interest rates unchanged at the January 27-28 meeting, with potential cuts anticipated later in the year.
