Gold futures for April delivery fell by ₹3,616, or 3.38%, to ₹1.49 lakh per 10 grams on the Multi Commodity Exchange (MCX), while silver for May delivery dropped sharply by ₹16,534, or 6.7%, ending at ₹2.31 lakh per kilogram, marking the white metal’s seventh consecutive session of losses.
Drivers behind the sell-off
Analysts pointed to a mix of strong US dollar, elevated US Treasury yields, and hawkish signals from the Federal Reserve as key reasons behind the fall.
“Gold prices slipped below the $4,800 per ounce level as stronger US producer inflation and a firm dollar outweighed safe-haven demand stemming from tensions in West Asia,” said Renisha Chainani, Head of Research at Augmont. “Elevated US Treasury yields continue to cap gains, keeping overall sentiment weak despite geopolitical risks.”
Globally, April gold on the Comex dropped $120.84, or 2.47%, to $4,775 per ounce. Silver futures for May delivery also extended losses, sliding $4.89, or 6.31%, to $72.69 per ounce.
Rising crude oil prices further compounded the pressure on silver.
Brent crude breached $110 per barrel following missile strikes by Iran on key energy sites, including a Qatari LNG facility, escalating energy security concerns and inflation risks worldwide.
“The combination of geopolitical uncertainty, surging energy costs, and a cautious Fed outlook is likely to keep precious metals under pressure in the near term,” said Jigar Trivedi, Senior Research Analyst at IndusInd Securities.
Central bank moves and market implications
The US Federal Reserve maintained its benchmark interest rate at 3.5–3.75%, signaling caution amid persistent inflation risks linked to the West Asia conflict. While the Fed continues to project one rate cut this year, policy easing remains contingent on clear signs of inflation cooling.
Justin Khoo, Senior Market Analyst – APAC at VT Markets, noted, “The Fed’s decision reflects a committee grappling with geopolitical shocks and persistent inflation. Higher for longer rates, coupled with expensive oil, squeeze liquidity and enhance safe-haven demand for gold and silver.”
Meanwhile, the Bank of Japan kept its short-term rates unchanged, keeping borrowing costs at the highest level since September 1995. Analysts said central bank caution globally is reinforcing volatility in precious metals markets.
–With agencies inputs