Gold and silver prices declined in domestic futures trade on Friday, October 23, amid weaker spot demand and selling pressure.
Rising crude oil prices and concerns that US interest rates could remain elevated for longer are adding to the pressure on precious metals.
On the Multi Commodity Exchange (MCX), silver futures for December delivery fell ₹4,191, or 2.1%, to ₹1.95 lakh per kg, with a turnover of 5,856 lots. Gold futures for December delivery declined ₹1,230, or 0.86%, to ₹1.42 lakh per 10 grams, with a turnover of 1,670 lots.
In international markets, silver fell 1.01% to $54.01 per ounce, while gold futures declined 0.26% to $4,014.23 per ounce in New York, according to PTI.
Why are gold and silver prices falling?
Gaurav Garg, Head of Research at Lemonn, attributed the pressure on bullion to rising crude oil prices, which have intensified inflation concerns and increased expectations that the US Federal Reserve may keep interest rates elevated for longer.
Higher interest rates can weigh on gold and silver, as they do not generate interest income and may become less attractive relative to interest-bearing assets.
Investors are now watching the US Federal Reserve’s October 27–28 meeting for signals on the interest-rate outlook, Garg said.
Crude oil prices have also risen amid escalating West Asia tensions and concerns over potential disruptions to global supplies following attacks on Saudi energy infrastructure, he added.
What could support domestic bullion demand?
In India, festive and wedding-related purchases could provide support to gold and silver consumption, even as international market movements influence prices.
“Despite near-term volatility driven by global economic cues, gold and silver continue to hold strong long-term appeal as trusted stores of value,” said Darshan Desai, CEO of Aspect Bullion & Refinery.
Desai said favourable movements in the dollar and interest-rate outlook, along with global uncertainties, could influence bullion market sentiment. However, domestic demand may offer support to consumption without necessarily preventing short-term price declines.
What should buyers and investors watch?
Domestic bullion prices are influenced by international prices, the rupee-dollar exchange rate and local demand. A weaker rupee can increase the cost of imported precious metals, potentially keeping domestic prices elevated even when global prices decline.
For retail buyers, MCX futures prices may not translate directly into equivalent changes in jewellery prices, which also depend on purity, applicable taxes, making charges and dealer margins.
Investors should therefore track global bullion prices, currency movements and the Federal Reserve’s policy signals while accounting for their investment horizon and risk tolerance.
-With agencies inputs
NOTE TO READERS
Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Readers should consult certified experts before making any investment decisions.