Gold, Silver Prices Slip Ahead of Fed Policy Decision

Gold slipped Rs 1,000 per 10 grams in Delhi on Tuesday, landing at Rs 1,31,600, as traders held their breath ahead of the Federal Reserve's policy announcement. The decline reflected a broader caution settling over Indian precious metals markets, where demand had grown thin. Silver followed the same downward path, losing Rs 4,500 per kilogram to close at Rs 1,80,500.

The retreat was not dramatic—gold had closed Monday at Rs 1,32,600 per 10 grams—but it signaled a market waiting. Traders and investors across the country were essentially frozen in place, unwilling to make large moves before the Fed spoke. According to the All India Sarafa Association, which tracks prices in the national capital, the pullback was driven by this hesitation rather than any sudden shift in fundamentals.

Analysts pointed to the same culprit: uncertainty about what the Federal Reserve would say and do. The central bank's policy committee was scheduled to meet December 9-10, and while markets had largely priced in a rate cut of 25 basis points, the real question lay elsewhere. Saumil Gandhi, a senior commodities analyst at HDFC Securities, explained that traders were now focused on the policy statement itself and the press conference that Fed Chair Jerome Powell would hold afterward. Those two events, he said, would shape how investors understood the Fed's thinking about where rates might go next—and that understanding would ripple directly into the dollar's strength and, by extension, gold's price.

International markets told a slightly different story. Spot gold actually rose $14.83, or 0.35 percent, to $4,205.57 per ounce. Praveen Singh, a research analyst at Mirae Asset ShareKhan, noted that gold was consolidating around $4,200 per ounce globally, holding steady as the market waited for Wednesday's decision. But Singh also flagged a headwind that was beginning to matter: global bond yields had climbed to their highest levels in months. The U.S. Treasury Department was preparing to issue $119 billion in bonds that week, and the higher yields reflected growing concern about fiscal deficits and inflation. That pressure was pushing commodities down even as some investors expected the Fed to cut rates.

The day also brought another data point worth watching. The Labor Department was set to release the JOLTS report—a measure of job openings—later in the afternoon. Singh said that figure could offer clues about the strength of the labor market and, therefore, about how much room the Fed actually had to cut rates without stoking inflation. Every piece of economic data had become a potential signal.

Renisha Chainani, head of research at Augmont, offered a more optimistic read on silver. She said the metal was holding up reasonably well, supported by what traders call risk aversion—a flight to safety when uncertainty rises—and by the broad expectation that the Fed would indeed cut rates by a quarter point at its December meeting. Silver, more volatile than gold and more tied to industrial demand, was being buoyed by that anticipation even as other commodities faced headwinds.

What emerged from the day's trading was a market in suspension. Prices had moved, but not far. The real action, everyone understood, would come when Powell spoke.