MCX gold has fallen sharply in recent sessions, slipping below the key ₹1.50 lakh per 10 grams level, while silver has also extended its decline, moving closer to the ₹2.35–2.40 lakh per kg zone.
The broader trend reflects sustained risk-off flows in global bullion markets.
In international markets, spot gold and silver extended losses before attempting a partial recovery, after sharp declines earlier in the week.
The weakness has been driven by rising expectations of tighter US monetary policy, with markets now pricing in a higher probability of a rate hike by the Federal Reserve later this year, following sticky inflation prints.
According to Carsten Menke, Head of Next Generation Research, Julius Baer, the ongoing sell-off is being largely driven by a shift in technical momentum, with “flows once again dominating fundamentals.”
He noted that investor positioning in physically backed gold and silver products has seen steady outflows, though a full liquidation phase has not yet emerged.
Menke added that the market focus has shifted decisively toward US growth and Fed policy, reducing the influence of traditional drivers such as central bank buying and industrial demand in the short term.
The weakness was also reinforced by macro data, with US inflation accelerating to multi-month highs, strengthening the dollar and pushing real yields higher, both typically negative for bullion. Analysts said this has increased the opportunity cost of holding non-yielding assets like gold and silver.
Spot gold briefly slipped toward the $4,000 per ounce mark, while silver tested levels near $61.50 before recovering some losses. However, analysts caution that volatility is likely to remain elevated as markets digest shifting Fed expectations and geopolitical developments.
Kotak Securities noted that the near-term trajectory for bullion will depend on the upcoming FOMC meeting, particularly the Fed’s updated dot plot and policy guidance. Any hawkish surprise could add further downside pressure, while escalation or de-escalation in geopolitical tensions may continue to drive sharp intraday swings.
Despite the ongoing correction, analysts maintain that structural support remains in place from central bank gold buying, even as industrial demand for silver remains sensitive to high prices and slowing global manufacturing momentum.
