Gold and Silver Prices Decline Amid Strong Dollar Index

Market Overview

New Delhi, November 4, 2025: The U.S. Dollar Index (DXY) rose by 0.12% on Tuesday, reaching a level of 99.99, which has increased pressure on precious metals in international markets. This marks the highest level in three months, impacting global markets, including India. In the Delhi bullion market, gold prices fell for the second consecutive day, dropping ₹1,200 per 10 grams to around ₹1.23 lakh, while silver saw a significant decline of ₹2,500 per kilogram, settling at ₹1,51,500 per kilogram. Experts believe that the Federal Reserve's cautious stance and a robust U.S. economy have driven investors away from safe-haven assets like gold.

International Precious Metals Market

The allure of precious metals has diminished in foreign markets as well. Spot gold closed down 0.2% or USD 7.84 at USD 3,993.65 per ounce on Tuesday. Silver also experienced a nearly 1% drop, reaching USD 47.73 per ounce. The strength of the dollar has made gold more expensive, prompting investors to shift towards other assets.

Fed Officials' Statements Impact Market Sentiment

Recent comments from U.S. Federal Reserve officials—Lisa Cook, Mary Daly, and Austan Goolsbee—have dampened market expectations. They indicated that there is no guarantee of an interest rate cut in December, citing a strong U.S. labor market and the Fed's commitment to controlling inflation. These remarks have led to an increase in the dollar index, causing a reduction in gold investments. Analysts suggest that this 'hawkish' tone is weakening market sentiment.

Where is Gold Cheaper Globally?

While gold prices remain high in India, several countries offer it at significantly lower rates. This is attributed to lower import duties, local production, and currency values. Here’s a list of the top five countries where gold is cheaper globally:
– Dubai (UAE): Cheapest at ₹60,000-62,000/10g (due to low taxes and duty-free zones).
– Thailand: ₹62,000/10g (affordable rates in Bangkok's gold market).
– Turkey: ₹63,000/10g (local production and low value-added tax).
– Singapore: ₹64,000/10g (tax-free shopping).
– Hong Kong: ₹65,000/10g (Asian hub with low import duties).
(Note: Rates are estimated based on current exchange rates; check before traveling.)

Future Outlook for Gold Prices

According to KOTAK Securities' AVP (Commodity Research) Kainat Chainwala, the market is now focused on the ADP employment data and ISM PMI reports. If U.S. employment figures are strong, further pressure on gold is likely. Additionally, the removal of gold tax incentives by China has weakened demand. Experts predict that gold prices may remain soft in the near future as investors remain cautious about the Fed's next moves.

Investor Insights

Commodity experts suggest that if gold falls below ₹1.23 lakh per 10 grams, the next support level could be ₹1.21 lakh. Meanwhile, ₹1.25 lakh has become a significant resistance level. Advice: Exercise caution in trading for now. Long-term investors may consider gradually starting to buy, while short-term traders should wait.

FAQs

1. How much did gold prices drop today?
Gold fell by ₹1,200 per 10 grams on Tuesday.
2. What about silver?
Silver decreased by ₹2,500 per kilogram, reaching ₹1,51,500 per kilogram.
3. Why did gold prices decline?
The strength of the dollar and weakened expectations for interest rate cuts by Fed officials contributed to the decline.
4. Will gold prices drop further in the coming days?
Yes, if the dollar remains strong and U.S. economic data is robust, further declines are possible.
5. Is it a good time to buy gold?
The market is volatile; long-term investors should buy gradually, while short-term traders should avoid it.