Gold, silver prices under pressure in India: What's the reason?
What's the story
Gold and silver prices are witnessing a downward trend in India. The decline is due to a stronger dollar, rising crude oil prices, and renewed geopolitical uncertainty surrounding US-Iran talks. Today, the Multi Commodity Exchange (MCX) gold fell below the ₹1.52 lakh mark, while MCX silver saw a sharper correction in trade amid international bullion weakness. In the global market, spot gold is trading at around $4,650-$4,680 per ounce, while spot silver erased early gains to trade below $80/ounce mark.
Analyst insights
Geopolitical tensions impact bullion markets
Manav Modi, a commodities analyst at Motilal Oswal Financial Services, said gold prices fell in early trade after weekly gains. He attributed the decline to a firm dollar and elevated oil prices following President Donald Trump's rejection of Iran's latest response to a US-backed peace proposal. Modi added that while bullion had gained on hopes of diplomatic progress earlier, sentiment reversed after talks broke down, reviving concerns around the Strait of Hormuz and global energy flows.
Inflation impact
Factors affecting gold and silver prices
Higher crude oil prices are stoking inflation fears, which are impacting interest rate expectations. This is a key factor for non-yielding assets such as gold. Gaurav Garg, a research analyst at Lemonn Markets, noted that while gold prices slipped amid these economic pressures, silver showed relative resilience due to steady retail demand linked to seasonal buying patterns in India.
Future outlook
What to expect from bullion in near term?
Domestic bullion trends are mirroring global weakness, with traders closely watching currency movement and crude oil volatility for further direction. Analysts expect Indian investors will closely monitor upcoming US inflation data and Federal Reserve commentary, which may determine near-term movement in gold and silver. Overall, experts expect bullion to remain range-bound with a negative bias unless geopolitical tensions escalate further or dollar strength eases.