India gold futures fall to three-month low as strong US dollar and higher rate outlook weigh

Gold futures slid to a three-month low in India on Wednesday. A firmer US dollar and expectations of higher US interest rates reduced demand. On the Multi Commodity Exchange, August gold fell Rs 1,834. The contract dropped 1.25 per cent to Rs 1,44,695 per 10 grams. Trading volume stood at 9,508 lots.

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The contract last traded near this level on March 23. On that date, it settled at Rs 1,45,069 per 10 grams. Analysts said traders were factoring in a tighter US policy path. That shift supported the dollar and pushed Treasury yields higher. Both moves often weaken appetite for precious metals.

Gold futures hit lows as US dollar strengthens

Gaurav Garg, Research Analyst at Lemonn Markets Desk, linked the fall to currency moves. "Gold prices fell in the domestic market amid a strengthening in the US dollar and prevailing concerns over the Federal Reserves policies, which have dampened the demand for bullion,\" Garg said. Traders stayed cautious as bets grew on rates staying high.

Weakness also appeared in overseas markets. Gold futures on the Comex slipped below USD 4,100 per ounce. That level was breached for the first time in nearly eight months. The metal fell USD 51.55, or 1.24 per cent, to USD 4,097.85 per ounce. It last traded near this level on October 28, 2025.

Gold futures pressured by Federal Reserve signals and risk-off mood

Analysts pointed to several global triggers behind the selloff. Renisha Chainani, Head of Research at Augmont, said losses continued despite a temporary US-Iran peace deal. Chainani cited a risk-off wave after a sharp correction in AI-linked stocks. Chainani also noted more hawkish Federal Reserve messaging.

Chainani said markets put the probability of a December 2026 rate hike at 86 per cent. The stronger rate outlook lifted the dollar index above 101. That added pressure on bullion prices. At the same time, doubts persisted over the durability of the US-Iran understanding. Mixed statements from both sides kept uncertainty alive.

US President Donald Trump on Tuesday said Iran had agreed to indefinite nuclear inspections. Tehran quickly disputed the claim, raising fresh doubts about the deal’s future. Chainani said investors were watching upcoming US inflation data. The US Personal Consumption Expenditures PCE numbers are due on Thursday. Traders expect clues on policy and gold prices.

With inputs from PTI