CHENNAI: Gold prices moved higher on Friday, supported by a softer US dollar and persistent global safe-haven interest, though gains remained limited as elevated prices continued to weigh on physical demand across Asia. In India, MCX gold futures opened at around Rs 1,27,022 per 10 grams, up about 0.21 percent from the previous close.
In the domestic retail market, gold was quoted near Rs 1,26,900 per 10 grams, marking a sharp rise of more than 6 percent over the past week. This rapid increase has dampened buying interest, with dealers in India offering discounts of up to US$ 43 per ounce, the highest in five months, to encourage purchases. The subdued sentiment mirrored trends in other major Asian hubs, where demand slowed as consumers waited for more favourable prices.
The upward movement in gold was primarily driven by softness in the US dollar, which made the metal more attractive for buyers holding other currencies. Expectations that the US Federal Reserve may ease rates in the coming months have also supported sentiment, although recent hawkish remarks from U.S. officials prevented a stronger rally.
Despite the day’s gains, gold continues to trade in a zone of caution. While global factors such as a weaker dollar and moderating inflation expectations provide a supportive backdrop, domestic demand remains weak at current price levels. The widening discounts in India suggest that retailers are struggling to draw customers into the physical market, a trend that could persist if prices stay elevated.
In the near term, gold may consolidate as markets balance rate-cut expectations against US policy signals. Any further easing in the dollar or increase in geopolitical uncertainty could push prices higher. On the other hand, a stronger US economic outlook or reduced expectations of monetary easing may put downward pressure on the metal.
For Indian buyers, the sharp price jump in recent days suggests a cautious approach. Seasonal demand could revive interest, but sustained buying is unlikely unless prices stabilise or correct from current levels.