Gold futures on the Multi Commodity Exchange (MCX) for June delivery fell ₹462, or 0.3%, to ₹1.51 lakh per 10 grams, with a trading volume of 8,310 lots. The decline mirrored weakness in international markets, where Comex gold for June delivery dropped $33.54, or nearly 1%, to $4,690 per ounce.
Silver also came under sharper pressure. On MCX, silver futures for May delivery fell ₹2,577, or 1.07%, to ₹2.38 lakh per kilogram. In global trade, Comex silver for May slipped 1.26% to $74.55 per ounce.
What is driving the decline?
Analysts said precious metals were weighed down primarily by strength in the US dollar and elevated crude oil prices, which have reinforced inflation concerns and altered interest rate expectations.
Oil prices have surged to around $95–$100 per barrel amid escalating tensions in the West Asia, particularly disruptions linked to the Strait of Hormuz. The renewed geopolitical friction between the US and Iran has kept energy markets volatile, with fears of supply disruptions intensifying inflation risks globally.
According to market experts, this environment has strengthened expectations that central banks, including the US Federal Reserve, may keep interest rates higher for longer, or even consider further tightening if inflation persists.
Gaurav Garg, Research Analyst at Lemonn Markets Desk, said the pressure on bullion reflects a combination of a firm dollar and rising energy costs, both of which have reduced investor appetite for non-yielding assets like gold.
Geopolitics and inflation fears in focus
Tensions between Washington and Tehran remain elevated, with diplomatic negotiations showing limited progress. While US authorities have pushed for easing restrictions on maritime routes, Iran has demanded the lifting of naval blockades before any meaningful de-escalation.
US policy signals, including naval enforcement actions in key shipping lanes, have further added to uncertainty, keeping crude oil elevated and supporting the US dollar as a safe-haven currency.
Global cues add pressure
In addition to geopolitical factors, stronger-than-expected US economic data, including preliminary PMI readings, has reinforced resilience in the US economy. This has reduced near-term expectations of interest rate cuts and added further pressure on gold prices.
Kotak Securities noted that bullion markets are also awaiting the University of Michigan consumer sentiment data for clearer signals on the Federal Reserve’s policy path.
Outlook
Market participants said gold and silver are likely to remain volatile in the near term, with direction largely dependent on US inflation trends, central bank policy expectations, and developments in the West Asia. While geopolitical risks continue to offer intermittent support, a strong dollar and high interest rate expectations are keeping upward momentum in check.
