From Our Business Desk
In the bullion market this week, both gold and silver registered notable declines amid a stronger US dollar, shifting expectations around US interest rates, and easing geopolitical concerns.
Domestic Market (MCX)
Gold futures for the August contract fell 2.6 per cent to settle at ₹1,43,478 per 10 grams.
Silver futures for the September contract dropped a sharper 6.2 per cent to close at ₹2,22,664 per kilogram.
International Market (COMEX)
Gold futures for the August contract eased 0.3 per cent to settle at $4,113.7 per troy ounce.
Silver futures for the September contract declined nearly 1.5 per cent to end at $60.16 per troy ounce.
The steeper correction on the Multi Commodity Exchange compared to COMEX reflects local currency dynamics and profit-booking in the domestic market.
Key Factors Driving the Weakness
A firmer US dollar made precious metals more expensive for overseas buyers, weighing on demand. Expectations of steady or higher US interest rates increased the opportunity cost of holding non-yielding assets such as gold and silver, prompting investors to favour yield-generating instruments.
Easing tensions in key hotspots reduced safe-haven buying, while robust US economic data further supported the dollar and tempered rate-cut hopes. Silver faced additional pressure due to its industrial linkages, leading to higher volatility. In India, movements in the rupee-dollar exchange rate amplified the domestic price decline, though some stability has emerged from recent policy measures.
Outlook
Near-term, prices may remain range-bound or under mild pressure as long as the dollar holds firm and global risk sentiment improves. However, structural supports — including central bank demand and long-term inflation hedging — could limit downside. Seasonal factors, such as subdued jewellery fabrication during this period, also played a role in the current lull.
For Indian investors and market participants, monitoring international cues, rupee movements, and upcoming economic data releases will be crucial. While corrections offer potential entry opportunities for long-term portfolios, volatility is expected to persist.
This market remains sensitive to macroeconomic shifts and geopolitical developments. Participants are advised to track global trends closely before taking positions.
