WASHINGTON : The decline comes days after gold witnessed renewed buying interest in India during the Diwali season, despite a sharp correction from its record highs earlier this year.

Spot gold fell 0.6 per cent to $4,115.12 an ounce, while US gold futures for December delivery rose 0.2 per cent to $4,123.90.

Kyle Rodda, a financial markets analyst at Capital.com, attributed the decline to profit-taking after prices retreated from the highs reached during the US trading session.

He said a continued easing of tensions in the Middle East, coupled with declining oil prices, could support gold by influencing the US dollar, inflation and interest rate expectations.

Meanwhile, Richmond Federal Reserve President Tom Barkin said the US central bank should proceed cautiously with monetary policy as it responds to inflation, which remains its biggest risk. He added that he did not have a clear baseline expectation for the Federal Reserve’s December meeting.

According to the CME Group’s FedWatch tool, traders currently see an 84 per cent probability of an interest rate increase in December. Higher interest rates generally reduce the appeal of gold, which does not generate interest or other regular returns, by increasing the opportunity cost of holding the metal.

Investors are closely watching the US Consumer Price Index (CPI) report due later on Tuesday, followed by Producer Price Index (PPI) data on Friday, for further indications of the inflation trajectory and the Federal Reserve’s policy direction.

Gold’s performance during this year’s Diwali season reflected the volatility in the precious metals market. In the run-up to Dhanteras, prices came under pressure, with domestic gold rates hovering around Rs 1,41,800 per 10 grams after touching Rs 1,37,863 earlier in the week, their lowest level since March 24. The prices remained considerably below the year’s record of Rs 1,80,779 per 10 grams.

The correction, however, encouraged bargain-seeking buyers to return to jewellery stores during the festive season. The India Bullion and Jewellers Association expected Dhanteras gold sales to increase by around 10 per cent compared with the previous year. Buyers also showed continued interest in gold coins and bars as investment options.

Despite the recent correction, gold recorded positive year-on-year returns. Data based on Multi Commodity Exchange (MCX) prices showed that gold averaged around Rs 1,27,000 per 10 grams during Diwali and Dhanteras in 2025, compared with Rs 1,43,184 on November 6, 2026, marking an increase of approximately 12.6 per cent. The metal had reached a peak of Rs 1,76,306 per 10 grams on January 29 this year before retreating nearly 18 per cent from that level by early November.

The festive-season price correction also highlighted the impact of global market movements on domestic gold demand, with lower prices providing some relief to consumers even as the metal remained significantly more expensive than during the previous Diwali.

Among other precious metals, spot silver fell 0.6 per cent to $53.04 an ounce. Platinum declined 0.3 per cent to $1,571.70, while palladium dropped 0.4 per cent to $1,037.50.

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