Gold Prices Drop Amid US Election and Fed Policy Uncertainty: MCX Gold Rate Declines

New Delhi, November 5, 2024 —

Gold prices dipped in the domestic futures market on Tuesday as investors exercised caution ahead of two major global events this week: the U.S. presidential election on November 5 and the Federal Reserve policy decision expected on November 7. Market sentiment remains subdued amid weak spot demand and muted international cues.

MCX Gold Prices Dips Amid Market Uncertainty

At 9:45 a.m., the Multi Commodity Exchange (MCX) reported a 0.11% decline in the gold rate for December 5 expiry contracts, which traded at ₹78,336 per 10 grams. This fall reflects cautious investor sentiment as markets anticipate high volatility from the U.S. election and upcoming Fed announcements.

International Markets Follow Suit

In international markets, gold prices saw a similar decline as investors awaited the results of the U.S. election and possible changes to monetary policy. The looming decision from the Fed is expected to shed light on interest rate directions, which typically impact gold prices.

U.S. Election Keeps Investors on Edge

Investor anxiety has heightened due to the tightly contested race between Democratic candidate Kamala Harris and Republican candidate Donald Trump. Opinion polls indicate a close fight, leading to speculation that the final result may remain unclear for days. Uncertainty over the election outcome is influencing market moves as investors wait to gauge potential policy impacts.

Fed’s Policy Decision Could Impact Gold Rates

With the Fed’s policy announcement slated for November 7, analysts expect potential rate hikes or hints at future interest rates, which could impact both the dollar’s strength and, consequently, gold prices. Historically, a higher interest rate environment makes gold less attractive as an investment compared to interest-bearing assets.

Outlook: How Long Will Gold Prices Remain Under Pressure?

Given the dual uncertainties of the U.S. election and Fed policy, gold prices may experience continued fluctuations throughout the week. Investors are likely to closely monitor these events before making substantial bets in the commodities market.

Stay updated with the latest on gold prices as markets navigate global economic and political shifts.