Gold prices in India on the Multi Commodity Exchange (MCX) traded lower on Tuesday, tracking weakness in global bullion prices after the yellow metal snapped a four-session winning streak.
Last checked, MCX gold October futures traded flat at Rs 1,63,304 per 10 grams. The contract had closed at Rs 1,63,229 on Monday.
The fall comes after gold prices surged by nearly Rs 9,000 per 10 grams in four trading sessions.
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Why Are Gold Prices Falling Today?
Gold eased below $4,650 an ounce on Tuesday but remained close to its highest level in more than three months. Investors turned cautious after the sharp recent rally, while markets awaited key US inflation data and Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole conference later this week.
The recent rally has been supported by concerns over US fiscal sustainability and dollar debasement. The US Treasury's plans to increase buybacks of long-dated government debt have raised expectations of greater liquidity support, while also renewing concerns around the US debt burden, inflation and the dollar.
Gold-backed exchange-traded funds have also seen stronger inflows, signalling improving investment demand and adding to the bullish backdrop for the precious metal.
What To Watch Next
Markets will now track US inflation data and comments from Fed officials for clues on the path of interest rates.
A stronger-than-expected inflation reading or hawkish signals from the Fed could lift Treasury yields and weigh on non-yielding gold, while renewed concerns over fiscal risks and dollar weakness could support bullion prices.
Despite Tuesday's dip, the broader trend remains supported by safe-haven demand, expectations around dollar debasement and stronger investment flows.
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