Gold and silver prices are taking a beating. But is this a sign of weakness or a chance to buy low? This episode breaks down the latest price movements, analyzes the factors driving the market, and reveals where gold and silver are headed next.

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Market Update: Gold and Silver Prices as of November 11, 2024

Gold and silver prices fluctuated slightly as of November 11, 2024, driven by a mix of global trends, including movements in the US dollar and regional market dynamics. Both precious metals experienced a decline in prices during early trading, following a week of notable price movements. This newsletter provides an overview of the latest developments and pricing trends for gold and silver, examining their movements across key Indian cities.

Gold Price Update: A Minor Dip Amid Stronger Dollar

Gold prices saw a slight decrease of ₹10 per 10 grams on November 11, 2024, following a period of price increases due to a softer US dollar. In the early trading session, the price of 24K gold in Delhi was ₹79,500 per 10 grams, while 22K gold stood at ₹72,890 per 10 grams. This represented a mild retreat after gold had rallied by ₹800 per 10 grams on November 9, following the US Federal Reserve's decision to cut interest rates by 25 basis points. The Fed's move, intended to curb inflationary pressures, resulted in a brief period of dollar weakness, which, in turn, boosted gold prices.

On November 8, 2024, spot gold prices had touched $2,700 per ounce, a high that reflected investor confidence in gold as a hedge against economic uncertainty. However, this optimism was tempered by a rebound in the strength of the US dollar. By November 11, the dollar had regained its footing, with the DXY index, which tracks the dollar against a basket of six major currencies, trading near the 105 level. This uptick in the dollar dampened the sentiment around gold, causing the metal to lose some of its earlier gains.

At the time of writing, gold was trading near $2,671 per ounce, down 0.41% from the previous day. The precious metal had hit a high of $2,686 in overnight trading, but as the day progressed, the strength of the dollar outweighed the previous momentum, pushing gold prices lower.

Silver Price Trends: A Slight Dip Amid Global Weakness

Silver prices also took a hit on November 11, 2024, with a decline of ₹100 per kilogram in most major Indian cities. On the same day, silver prices in Delhi were ₹93,900 per kilogram, while in Chennai, prices stood higher at ₹1,02,900 per kilogram. This dip in silver prices comes after a significant rally on November 9, driven by renewed demand from coin makers and announcements of stimulus measures from China aimed at boosting the economy.

On the global front, silver was trading at $31.37 per ounce, reflecting a slight gain of 0.26% compared to the previous trading day. This is in contrast to the drop in domestic silver prices, which suggests weaker local demand. Despite the decline in prices, silver's global performance remains relatively steady, having briefly touched a high of $31.42 and a low of $31.17 in recent trades.

Comparing Gold and Silver Prices: A Week of Fluctuations

Looking at the broader trend over the past week, both gold and silver have faced some volatility, influenced largely by fluctuations in the value of the US dollar and global demand factors. On November 4, 2024, for example, gold prices were significantly higher, with 24K gold trading at ₹80,390 per 10 grams and silver at ₹96,900 per kilogram. However, as the dollar regained strength and concerns over tariff hikes in the US escalated, prices began to correct.

A comparison of gold and silver prices across key dates provides a clearer picture of their movements:

• November 11: 22K Gold – ₹72,740, 24K Gold – ₹79,350, Silver – ₹93,900

• November 9: 22K Gold – ₹72,750, 24K Gold – ₹79,360, Silver – ₹94,000

• November 8: 22K Gold – ₹71,990, 24K Gold – ₹78,550, Silver – ₹92,900

• November 7: 22K Gold – ₹72,090, 24K Gold – ₹78,650, Silver – ₹93,900

• November 6: 22K Gold – ₹73,540, 24K Gold – ₹80,230, Silver – ₹95,900

It’s evident from this data that gold prices experienced a noticeable decline towards the middle of the week, especially as the US dollar regained strength. Silver, on the other hand, showed a more consistent trend, with the rally on November 9 being somewhat tempered by the weaker demand across Indian markets on November 11.

Price Breakdown in Major Indian Cities

Gold and silver prices vary across Indian cities due to regional market conditions, taxes, and other local economic factors. Below are the prices for both metals in key cities as of November 11, 2024:

• Delhi: 22K Gold – ₹72,890, 24K Gold – ₹79,500, Silver – ₹93,900

• Mumbai: 22K Gold – ₹72,740, 24K Gold – ₹79,350, Silver – ₹93,900

• Chennai: 22K Gold – ₹72,740, 24K Gold – ₹79,350, Silver – ₹1,02,900

• Kolkata: 22K Gold – ₹72,740, 24K Gold – ₹79,350, Silver – ₹93,900

As seen, prices are generally consistent across major cities for both gold and silver, with Chennai reflecting slightly higher silver prices. This disparity can be attributed to local factors such as market demand, inventory, and transportation costs.

Global Influences on Precious Metal Prices

Gold and silver, being globally traded commodities, are significantly affected by macroeconomic factors. A major driver of the recent price changes has been the US dollar's strength. As the dollar rises, precious metals typically experience downward pressure since a stronger dollar makes gold and silver more expensive for holders of other currencies.

Another key influence on gold and silver prices is the policy actions of major central banks. The US Federal Reserve's rate cut at the beginning of November led to a temporary dip in the value of the dollar and a corresponding rise in gold prices. However, as markets adjust to the potential effects of further rate hikes under the Biden administration, the dollar's strength has begun to push back against the gains made by precious metals.

Additionally, global factors such as geopolitical tensions and economic data out of major markets like China and the US continue to play a crucial role in shaping investor sentiment towards precious metals. Recent announcements from China regarding economic stimulus measures helped provide some support for silver prices.

Conclusion: A Dynamic Market Outlook

The precious metals market is witnessing a period of uncertainty as both gold and silver continue to react to shifts in the US dollar and global economic policies. Despite short-term fluctuations, both metals remain attractive as safe-haven assets, especially during times of economic instability. While gold has experienced a brief retreat due to a stronger US dollar, its appeal as a hedge against inflation remains strong.

Silver, on the other hand, continues to show some resilience, especially with global demand supported by industrial applications and government stimulus measures. However, local demand factors in India, such as demand for silver from coin makers, play a significant role in determining its price on the domestic front.

As the global economic landscape evolves, precious metal prices are likely to remain volatile, with investors and consumers alike keeping a close watch on currency movements and policy announcements.

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Disclaimer: This newsletter is for informational purposes only and should not be construed as financial or political advice.

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