Precious metal prices fell sharply on Wednesday, with gold dropping below the Rs 1.5 lakh threshold in domestic futures trading. The steep decline reflects a weakening international market driven by a strengthening US dollar, climbing oil prices, and mounting anticipation of higher interest rates.

 

Gold futures slide below key threshold

On the Multi Commodity Exchange (MCX), gold futures for August delivery started the session down by Rs 2,517 (or 1.65%) at Rs 1,49,926 per 10 grams, compared to its previous close of Rs 1,52,443. The contract saw a minor recovery during early trading hours, shifting to Rs 1,50,213, which was still down 1.46%.


Silver faces intense selling pressure

Silver prices also witnessed heavy selling pressure alongside gold. MCX silver futures for July delivery opened lower by Rs 4,519, or 1.89%, at Rs 2,34,009 per kg compared with the previous close of Rs 2,38,528. The contract later recovered slightly from its opening lows to trade at Rs 2,35,877, representing a total drop of 1.11%.

 

Global precious metals market slump

This domestic slump followed losses in the global markets, where both metals extended their downward runs. Spot gold slipped 1.8% to $4,187.59 per ounce—its lowest since March 23. Concurrently, US gold futures for August delivery fell 1.7% to $4,213.40 per ounce.

 

Retail 22K and 24K gold rates across major Indian cities

City22K Gold (Per 10g)24K Gold (Per 10g)
DelhiRs 1,36,600Rs 1,48,960
JaipurRs 1,36,600Rs 1,48,960
AhmedabadRs 1,36,500Rs 1,48,910
MumbaiRs 1,36,450Rs 1,48,860
PuneRs 1,36,450Rs 1,48,860
HyderabadRs 1,36,450Rs 1,48,860
ChennaiRs 1,36,450Rs 1,48,860
BengaluruRs 1,36,450Rs 1,48,860
KolkataRs 1,36,450Rs 1,48,860

 

Rising yields and geopolitical strain drive down market sentiment

Market analysts blame the slump on escalating US bond yields and a robust US dollar, which makes precious metals costlier for international buyers holding alternate currencies, thereby dampening demand. Additionally, crude oil prices jumped roughly 1%, sparking inflation anxieties and bolstering forecasts that interest rates will stay higher for longer.

Market volatility was further fueled by fresh geopolitical tensions between the US and Iran. The US initiated military strikes in response to claims by President Donald Trump that Tehran downed a US Apache helicopter over the Strait of Hormuz. Though bullion traditionally acts as an inflation hedge, elevated interest rates diminish the attractiveness of non-yielding assets. Investors are now closely watching upcoming US CPI and PPI inflation data to gauge the Federal Reserve's next policy moves.