On the domestic commodities exchange, MCX gold futures were trading 0.27% lower at ₹1.59 lakh per 10 grams, while MCX silver futures declined 0.71% to ₹2.66 lakh per kilogram.
The weakness in domestic bullion prices mirrors global market movements, where gold has been heading toward a second consecutive weekly decline.
Global cues shaping domestic bullion prices
In international markets, spot gold was trading around $5,112.82 per ounce, while US gold futures for April delivery were slightly lower at $5,116. Spot silver rose about 1% to $84.59 per ounce.
Despite the modest rebound, gold has fallen more than 1% so far this week, reflecting pressure from rising energy prices and the shifting outlook for US interest rates.
According to Tim Waterer, fears of inflation driven by higher oil prices are complicating the outlook for monetary policy.
He noted that concerns about whether the US Federal Reserve will be able to cut interest rates if crude prices remain elevated are “counteracting gold’s appeal,” even though geopolitical risks are keeping the metal on investors’ radar as a safe-haven asset.
West Asia tensions and oil surge
Market sentiment has been shaped by the intensifying conflict in the West Asia. Iran’s Supreme Leader Mojtaba Khamenei said Tehran would keep the strategic Strait of Hormuz closed as leverage against the US and Israel, raising concerns over global energy supplies.
Oil prices have surged above $100 a barrel amid attacks on tankers in the Gulf and fears of prolonged disruption in the region. Rising crude prices can stoke inflation, which may limit the scope for interest rate cuts by central banks.
At the same time, US President Donald Trump has again urged the Federal Reserve to reduce borrowing costs. However, market participants expect the Fed to keep interest rates unchanged in the 3.5%–3.75% range at the end of its upcoming policy meeting.
Why bullion prices are reacting
Analysts say multiple global factors, including the dollar, oil prices and bond yields, are influencing bullion markets simultaneously.
According to Manav Modi, Commodities Analyst, Motilal Oswal Financial services, gold has struggled to gain momentum as a stronger US dollar and rising bond yields have offset safe-haven demand triggered by geopolitical tensions.
He added that broader weakness in global equity markets has also contributed to pressure on bullion, as investors sometimes liquidate gold positions to raise cash during periods of sharp market volatility.
The US dollar has remained firm partly because higher oil prices tend to benefit the US economy given its status as a major energy exporter, further limiting upside in gold prices.
Domestic trends and investor demand
Piyush Jhunjhunwala, Founder & CEO, Stockify, said domestic bullion prices are influenced by international gold benchmarks, movements in the US dollar, crude oil prices and central bank policy decisions. Even small changes in global markets can translate into noticeable shifts in local bullion rates.
Long-term outlook remains supported
Despite short-term volatility, analysts say gold continues to hold its position as a long-term store of value in India.
Demand typically strengthens during festive and wedding seasons such as Dhanteras and Akshaya Tritiya.
–With Reuters inputs