On the Multi Commodity Exchange (MCX), gold contracts for August delivery fell by ₹1,701, or 1.19%, to ₹1.40 lakh per 10 grams, with a turnover of 2,103 lots. Silver contracts for September delivery also witnessed heavy selling pressure, declining by ₹5,380, or 2.35%, to ₹2.23 lakh per kilogram in 2,219 lots.
The decline in domestic bullion prices mirrored global trends, where COMEX Gold traded near seven-month lows at around $3,993 per ounce, while silver dropped nearly 3% to around $57.73 per ounce.
Analysts said the correction in precious metals was largely driven by expectations that the US Federal Reserve could maintain a tighter monetary policy stance if inflation remains elevated. Recent comments from Federal Reserve officials reinforced market expectations of a possible interest rate hike later this year, reducing the appeal of non-yielding assets such as gold and silver.
Investor sentiment also remained cautious due to geopolitical uncertainty in the West Asia. Hopes for a lasting US-Iran peace arrangement weakened after Iranian officials reportedly declined immediate talks with US envoys following renewed regional hostilities. Rising oil prices linked to the tensions have further added to inflation concerns globally.
According to market participants, traders are now closely monitoring key US economic indicators, including the June ADP employment report and upcoming nonfarm payrolls data, which are expected to offer further clarity on the Federal Reserve’s interest rate trajectory.
Commenting on the market trend, Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions, said gold and silver continue to remain under pressure after both metals slipped near seven-month lows. He noted that gold’s break below the key $4,000 an ounce level could technically open the door towards lower support zones near $3,600 an ounce, while silver’s decline below $60 an ounce may increase the possibility of further weakness towards $50 an ounce levels. However, he added that oversold conditions could also trigger short-term recovery rallies in the near term.
-With agencies inputs
