Gold prices slip amid dollar strength, rate hike concerns

International gold markets extended their downward trend on November 12, with bullion prices pressured by a robust US dollar that makes gold more expensive for foreign buyers. The stronger greenback, coupled with persistent market anxiety over potential further interest rate hikes by central banks, weighed heavily on investor sentiment toward precious metals.

In India's major financial centres, the weakness in global gold prices translated into lower domestic rates for both 24-karat and 22-karat gold. Mumbai, Delhi, and Bengaluru all recorded declines from the previous trading day, reflecting the broader international market movement.

Market analysts attribute the recent softness in gold prices to the Federal Reserve's hawkish stance on monetary policy. Concerns that central banks may maintain elevated interest rates longer than previously anticipated have reduced the appeal of non-yielding assets like gold, which offer no interest income to investors.

The decline comes as traders navigate competing economic signals, with some market participants watching for clarity on the terminal rate for interest hikes. Gold typically performs better during periods of monetary easing and when real yields on financial instruments are low, making current conditions less favourable for bullion demand.