Mumbai, August 19: Gold and silver prices have sharply declined in the domestic market on Wednesday, reflecting weak signals from global markets. Rising U.S. bond yields, high crude oil prices, and a shifting perception of safe investments have put pressure on precious metals. This trend was evident on the Multi Commodity Exchange (MCX), where gold fell below ₹1.54 lakh per 10 grams, and silver dropped below ₹2.30 lakh per kilogram.
In the international market, spot gold traded below $4,350 per ounce, while silver struggled around $62.8 per ounce. This weakness in global markets directly impacted Indian markets, leading to increased selling pressure among investors.
The domestic futures market saw the most significant pressure on silver. On the MCX, the September delivery silver price fell from the previous session’s close of ₹2,32,419 per kilogram to a day’s low of ₹2,27,931 per kilogram. During this period, silver recorded a decline of ₹4,488, or 1.93%. However, at the time of writing, silver was trading at ₹2,28,685 per kilogram, down by 1.61%, or ₹3,734.
Market analysts suggest that broader commodity weakness and profit booking have led to increased pressure on silver.
Meanwhile, gold prices also remained weak. The October delivery gold futures on the MCX slipped below ₹1.54 lakh per 10 grams, reaching a day’s low of ₹1,53,404, down by 0.55%, or ₹858, from the previous close of ₹1,54,262. As of the latest update, gold was trading at ₹1,53,681 per 10 grams, reflecting a decline of 0.38%, or ₹581. The softness in international gold prices and a strong dollar index have also influenced gold’s movement.
Experts believe that the near-term direction for both gold and silver will depend on U.S. economic data, Federal Reserve interest rate policies, and geopolitical conditions in the Middle East. If bond yields and crude oil prices continue to rise, pressure on precious metals may persist. However, in the event of new global tensions or expectations of interest rate cuts, gold and silver could regain their appeal as safe investment options.
According to specialists, the ongoing increase in U.S. Treasury yields remains a significant negative factor for precious metals. The 30-year U.S. Treasury yield has reached its highest level in nearly 19 years, while other government bond yields are trading at multi-decade highs. High bond yields attract investors to safer, fixed-return options, impacting the demand for non-yielding assets like gold and silver.
Additionally, the continued rise in crude oil prices has heightened market concerns. U.S. WTI crude and Brent crude prices are hovering around $85.5 and $91.5 per barrel, respectively. High crude oil prices raise fears of global inflation, strengthening the likelihood of sustained high interest rates, which also pressures precious metals.
The ongoing tensions in the Middle East are playing a crucial role in determining market direction. There are no clear signs of easing tensions between the U.S. and Iran. Concerns regarding security in the Strait of Hormuz persist, and incidents of attacks on maritime vessels have increased uncertainty about energy supplies. As a result, investors are now awaiting insights from the minutes of the U.S. Federal Reserve’s July meeting and potential signals from Fed Chairman during the Jackson Hole symposium to clarify the future direction of monetary policy.
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