Singapore, June 26:

Gold prices in India saw a sharp fall today, amid a weak global trend. On MCX, gold futures for August delivery fell 0.70% to ₹34,322 after prices rose closer to ₹35,000 on Tuesday. Gold futures for October delivery were down also down 0.70% at ₹34,500. On Tuesday, October gold futures prices had shot up above ₹35,000 to ₹35,100. In global markets, prices slipped more than 1% today after as US Federal Reserve officials played down expectations of aggressive rate cuts.

Spot gold rates were down at $1,405, heading for its first decline in seven sessions.

After years of under-performance, gold prices have rallied in recent months to hit their highest level in six-years at $1,438.63 in the previous session, amidst a flurry of geo-political events and likelihood of global growth slowdown.

Some investors also locked in profits at higher levels, say analysts.

On Tuesday, St. Louis Fed President James Bullard said he does not think the US economy is dire enough to warrant a 50-basis-point cut in July.

US Fed Chairman Jerome Powell also asserted the central bank’s independence, stating that it is “insulated from short-term political pressures”, pushing back against US President Donald Trump’s demand for a significant rate cut.

Also, hurting bullion appeal, the dollar index rose 0.2% today moving away from multi-month lows.

Lower interest rates reduce the opportunity cost of holding non-yielding bullion by helping pushing down bond yields. Lower rates also weaken the dollar, making dollar-priced gold more affordable for buyers with other currencies.

Analysts will be closely watching the progress of trade talks as US President Donal Trump and Chinese President Xi Jinping meet in Japan during the G20 summit on Saturday.

A positive outcome in trade talks between Trump and Chinese President Xi Jinping at a G20 meeting on June 28-29, or healthy US economic data that would reduce the likelihood of rate cuts, could hurt gold prices, warn analysts.

Among other precious metals, silver fell 1.1% to $15.20 per ounce and palladium dipped 0.2% to $1,525.44.