Gold, silver prices plummet as US Fed signals only 2 rate cuts in 2025

New Delhi, Dec 19: Gold and silver prices fell sharply in the national capital on Thursday due to a muted demand by jewellers amid a weak global trend, according to the All India Sarafa Association.

The precious metal of 99.9 per cent purity plunged Rs 800 to Rs 78,300 per 10 grams. It closed at Rs 79,100 per 10 grams in the previous trading session on Wednesday.

Traders said the bullion prices slipped as the US Federal Reserve Chair Jerome Powell takes a stance after the US central bank decided to cut interest rates.

The Fed now projects just two quarter-percentage-point rate reductions by the end of 2025, down from their September estimate of four rate cuts earlier, they added.

Silver also plummeted Rs 2,000 to Rs 90,000 per kg on Thursday. The white metal settled at Rs 92,000 per kg in previous close.

The price of gold of 99.5 per cent purity slumped Rs 800 to Rs 77,900 per 10 grams against the previous close of Rs 78,700 per 10 grams on Wednesday.

Meanwhile, in futures trade on the MCX, gold contracts for February delivery dipped Rs 303, or 0.4 per cent, to trade at Rs 76,350 per 10 grams.

Silver contracts for March delivery declined Rs 1,630 or 1.8 per cent to Rs 88,750 per kg on the bourse.

Comex gold futures in the Asian trading session fell USD 19.10 per ounce, or 0.72 per cent, to USD 2,634.10 per ounce.

“Gold fell sharply post-Federal Open Market Committee (FOMC) meeting as the Fed’s indication of a slower pace of interest rate cuts than previously estimated for the next year,” Saumil Gandhi, Senior Analyst of Commodities at HDFC Securities, said.

Silver quoted 2.47 per cent lower at USD 29.98 per ounce in the international markets.

“Investors are anticipating US weekly unemployment claims data to be released later on Thursday to assess the strength of the labour market, while focusing on the Personal Consumption Expenditures (PCE) price index data on Friday,” Abans Holdings’ Chief Executive Officer Chintan Mehta said.

Although participation in bullion markets has declined compared to previous levels, prices could strengthen as investors gradually increase their exposure.

We expect gold prices to rise further, but any delay in additional interest rate cuts could lead to short-term declines, creating opportunities for accumulation, Mehta said.

According to Nish Bhatt, Founder & CEO, Millwood Kane International, we expect volatility to continue, major cues will be the new administration in the US, and the announcement on trade tariffs.

Traders expect gold prices to be on a strong footing given the geopolitical situation across markets, however, rupee will see some weakness in the short to medium term, Bhatt, said.