Gold Futures Dip Nearly 1% on Profit Booking and Easing Geopolitical Tensions
Gold futures on the MCX experienced a dip of close to 1% on Thursday, following a record high in the previous session. This decline was attributed to profit booking, along with easing geopolitical tensions and a strengthening dollar.
The fears of a potential US-EU trade conflict were moderated after US President Donald Trump adopted a softer stance on the acquisition of Greenland.
In specific numbers, MCX gold February futures saw a decrease of 0.78% to Rs 1,51,665 per 10 grams, while MCX silver March futures dipped 0.62% to Rs 3,16,509 per kg.
Furthermore, gold rates also saw a drop in the international futures market, with US gold futures consolidating near $4,790–$4,800 per troy ounce after reaching a fresh record high above $4,887 earlier in the week on COMEX.
Despite the current dip, analysts have highlighted that the broader uptrend in the market remains strong, with healthy profit booking being observed amidst easing tariff fears.
Analysts also noted a decline in ‘OI level’ in the futures market, currently standing at 9870 lots, indicating a long unwinding by traders without any addition in long positions.
Meanwhile, COMEX silver maintained a firm position near $92–$93 after recently hitting record highs above $95.80. This was attributed to robust industrial demand in sectors such as solar, EVs, AI, electronics, and safe-haven flows amidst tightening global supply.
The stability of the US dollar was also a contributing factor, with Trump announcing that tariffs would not be imposed on European countries over Greenland. The dollar index rose to 98.81, making gold slightly more expensive for overseas buyers.
At the World Economic Forum in Davos, Trump emphasized that force would not be used to acquire the Arctic island, stating that he had “formed the framework of a future deal with respect to Greenland” with NATO Secretary General Mark Rutte.
Market attention is also focused on upcoming cues from November Personal Consumption Expenditures (PCE) data, the Fed’s preferred inflation gauge, and weekly jobless claims, both scheduled for later in the day.
Most market participants anticipate that the US Federal Reserve will maintain interest rates unchanged at its January 27-28 meeting, with expectations of two more cuts later in the year.
