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Informist, Wednesday, Sept. 17, 2025

By Reshma Ravi

MUMBAI – Futures contracts of gold on the Multi Commodity Exchange of India fell Wednesday, tracking a fall in contracts on the COMEX because of a slight recovery in the dollar index. The drop in gold prices was also likely to have been driven by profit-taking after prices hit a fresh record high in the previous session due to increasing expectations of the US Federal Reserve cutting interest rates, analysts said. 

At 1821 IST, the most-active October GOLD contract on the MCX was down 0.5% at INR 109,660 per 10 grams. The most-active December GOLD contract on the COMEX was down 0.4% at $3,709.7 per ounce.

"August retail sales rose more than anticipated, and import prices saw their largest rise in seven months, surprising analysts who had expected a decline," Kedia Advisory said in an emailed note. Retail sales data from the US on Tuesday showed that consumer spending in the world's largest economy was strong. Retail sales in August rose 0.6% from the prior month, higher than estimates of a 0.2% increase. "Despite the stronger data, signs of a cooling US labour market continued to fuel expectations that the Fed will deliver a 25 basis point rate cut – the first since December – and potentially signal an easing cycle extending into 2026," Kedia Advisory said.

Traders now price in a 94% probability of a 25-basis-point rate cut by the US Federal Open Market Committee later in the day. They also see a 6% probability of a 50-bps cut, according to CME's FedWatch tool. Lower interest rates increase the appeal of non-interest-yielding precious metals. Traders also expect 75 bps of cuts during the rest of the year. They will also closely track the FOMC's projections or 'dot plot'.

At 1826 IST, the dollar index, which measures the strength of the greenback against a basket of six currencies, was up 0.1% at 96.78. A strong dollar makes dollar-denominated commodities such as gold less appealing for other currency holders, thereby denting demand.

SILVER contracts on MCX and COMEX were down, tracking losses in gold. Traders also booked profits on the domestic exchange after prices rose to fresh record highs in the last session, analysts said. At 1823 IST, the most-active December silver contract on the MCX was down 1.5% at INR 126,898 per kilogram. The same-month contract on COMEX was down 2% at $42.14 per ounce.  

Outlook for the rest of the session:

--MCX gold seen at INR 107,957–INR 110,787 per 10 grams

--COMEX gold seen at $3,670.0–$3,740.0 an ounce

--MCX silver seen at INR 123,004-INR 129,594 per kg

--COMEX silver seen at $41.70-$42.80 an ounce

End

US$1 = INR 87.82

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Avishek Dutta

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