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Gold-Silver Prices Fall Again: Here Are the 5 Key Reasons Behind the Decline

Gold and silver prices slipped once again on Thursday, 20 November, as global market sentiment remained cautious. Interestingly, this time the pressure on precious metals is driven not just by a stronger US dollar but also by a mix of shifting monetary cues, rising volatility, and new economic signals emerging worldwide. Experts believe these factors are collectively keeping bullion under pressure despite strong demand in India during the wedding season.

Domestic Prices Stay Firm Despite Global Weakness

In India, retail prices are still supported by festive and wedding purchases.

• 24-carat gold is priced at ₹12,469 per gram

• 22-carat gold is at ₹11,430 per gram

• Silver is trading at ₹165 per gram, or ₹1.65 lakh per kg

On MCX as well, both gold and silver were trading over 0.50% lower by 2:20 PM.

Mehta Equities’ Rahul Kalantri notes that gold has strong support near $4,035–$4,000 per ounce, while resistance levels are seen around $4,115–$4,140 per ounce.

Why Global Prices Are Under Pressure

In the international market, spot gold dropped 0.4% to $4,064 per ounce, while US gold futures fell 0.5%. Silver too tumbled more than 1%. Analysts say the correction is largely driven by a stronger dollar and fading expectations of a December rate cut by the US Federal Reserve.

Kelvin Wong, Senior Market Analyst at OANDA, said that expectations of a December rate cut have sharply declined in the last two weeks. He expects gold to stay below $4,100 in the short term, with potential downside toward $4,000–$3,980.

5 Major Reasons Behind the Fall in Gold Prices

1. A Stronger US Dollar

The dollar continues to strengthen, making gold more expensive for buyers using other currencies. This reduces global demand.

2. Rate-Cut Expectations Have Fallen Sharply

Market expectations for a December Fed rate cut have fallen from nearly 50% to around 33%, weakening gold’s safe-haven appeal.

3. Delay in the US Non-Farm Payrolls Report

The unexpected delay in the key employment data has increased uncertainty, putting additional pressure on gold.

4. Rising Concerns Over Japan’s Carry-Trade Unwinding

Volatility triggered by fears of carry-trade unwinding has unsettled global markets, limiting the appeal of safe-haven assets.

5. Strong Performance of US Tech Stocks

Impressive earnings from companies like Nvidia have shifted investor interest back to equities, reducing demand for bullion.

Will the Federal Reserve Cut Rates?

A rate cut looks less likely now. Recent meeting minutes suggest the Fed remains cautious about loosening policy too soon. Motilal Oswal Financial Services’ Manav Modi described the latest meeting as a “divided Fed,” indicating differences of opinion among policymakers.

He added that the cancellation of October’s US jobs data report and growing anxiety over Japan’s carry-trade unwinding have intensified global market volatility.

What is carry trade?
Investors borrow money in a low-interest currency (like the Japanese yen) and invest it in higher-yielding markets. When markets become volatile, they quickly unwind these positions, triggering sharp movements across global assets.

Market Focus Now Shifts to US Jobs Data

Investors are now waiting for the delayed US non-farm payrolls report, which will offer clearer guidance on future monetary policy. Until then, markets are expected to remain cautious.

Wedding Season Keeps Indian Demand Steady

Despite global pressure, demand in India remains active. IBJA Vice President Aaksha Kamboj said that wedding-related buying has supported 24-carat gold prices. Silver demand from jewelers and investors also remains stable.

Support and Resistance Levels to Watch

According to Mehta Equities:

• Support: $4,035–$4,000 per ounce

• Resistance: $4,115–$4,140 per ounce

With the wedding season picking up, domestic demand may continue to cushion prices even if international trends stay weak.

Disclaimer: Expert views mentioned in this article belong to respective analysts and brokerage firms. Investors are advised to consult certified financial advisors before making investment decisions.