On the Multi Commodity Exchange (MCX), gold futures for August 5 delivery fell 0.79% to ₹1.42 lakh per 10 grams, while silver futures for September 4 delivery declined 0.75% to ₹2.18 lakh per kg.
Globally, COMEX gold futures were down 0.39% at $4,144.40 an ounce, while COMEX silver futures slipped 0.22% to $58.89 an ounce. Spot gold also edged lower after touching a one-week high in the previous session.
Why are gold and silver prices falling today?
The decline in domestic prices largely mirrors global trends.
After rallying earlier this week, gold and silver came under pressure as the US dollar rebounded from its sharpest single-day decline since January 2023. A stronger dollar typically weighs on precious metals by making them more expensive for holders of other currencies.
Profit booking also contributed to the decline after bullion prices climbed following the US Federal Reserve’s decision to keep interest rates unchanged.
What’s supporting gold despite today’s decline?
Even with Friday’s (July 31’s) correction, gold is on track to post its first monthly gain in five months, supported by easing expectations of aggressive US monetary tightening and heightened geopolitical tensions in the Middle East, which have boosted demand for safe-haven assets.
Recent US economic data has also reinforced expectations that the Federal Reserve may proceed cautiously on future rate decisions. Softer inflation readings and signs of moderating economic growth have supported bullion, although higher bond yields and a stronger dollar continue to cap gains.
“Precious metals remain range-bound. Cooling US economic data is lending support, while a firmer dollar, elevated bond yields and the Federal Reserve’s hawkish stance are limiting sharp upside. Both gold and silver remain on track for their first monthly advance in several months,” said Kaynat Chainwala, AVP – Commodity Research, Kotak Securities.
What does it mean for Indian buyers?
Domestic gold and silver prices are influenced by international bullion prices, the rupee’s movement against the US dollar and import-related costs. As a result, local prices often move in line with global trends, although domestic demand and currency fluctuations can amplify or soften those moves.
India’s physical gold demand remained under pressure during the April-June quarter. According to the World Gold Council, gold demand declined 6% year-on-year as elevated prices weighed on buying. However, overall consumer spending on gold touched a record high in value terms, while jewellery demand improved from the previous quarter, supported by festive and wedding-related purchases.
What should investors watch next?
Markets will closely watch the University of Michigan’s Consumer Sentiment and Inflation Expectations data later in the day for fresh clues on the US inflation outlook and the Federal Reserve’s policy path.
Analysts also expect movements in the US dollar, Treasury yields and developments in the West Asia to remain the key drivers for gold and silver prices in the near term.
-With agencies inputs
