Highlights:
- MCX gold falls ₹2,517 to ₹1,49,926 per 10 grams.
- Silver prices plunge ₹4,519 to ₹2,34,009 per kg.
- International gold hits 11-week low amid stronger dollar.
- Rising crude oil prices fuel inflation and rate hike concerns.
- Investors await key US inflation data for policy cues.
Mumbai, June 11: Gold and silver prices in India witnessed a sharp decline on Wednesday, mirroring a broad-based selloff in global precious metals markets as investors reacted to mounting inflation concerns and expectations of higher interest rates.
On the Multi Commodity Exchange (MCX), gold futures for August delivery opened ₹2,517 lower, or 1.65%, at ₹1,49,926 per 10 grams, compared to the previous close of ₹1,52,443. Silver futures for July delivery also suffered significant losses, opening ₹4,519 lower, or 1.89%, at ₹2,34,009 per kilogram against the earlier close of ₹2,38,528.
The decline followed a steep drop in international bullion prices, where spot gold slipped 1.8% to $4,187.59 per ounce, its lowest level in nearly 11 weeks. US gold futures for August delivery fell 1.7% to $4,213.40 per ounce, while spot silver declined 1.5% to $64.43 per ounce.
Market analysts attributed the weakness in precious metals to a stronger US dollar and a surge in crude oil prices following renewed geopolitical tensions between the United States and Iran. The rising dollar has made gold more expensive for holders of other currencies, reducing demand in global markets.
Meanwhile, the rally in crude oil prices has intensified concerns about inflationary pressures worldwide. Investors now fear that central banks, particularly the US Federal Reserve, may be forced to keep interest rates elevated for longer or even implement additional rate hikes to combat inflation.
According to market estimates, traders are increasingly betting on tighter monetary policy in the coming months. Higher interest rates typically diminish the appeal of non-yielding assets such as gold and silver, prompting investors to shift toward interest-bearing investments.
Despite gold’s traditional role as a hedge against inflation, the prospect of prolonged high borrowing costs has overshadowed its safe-haven appeal in the short term.
Market participants are now closely monitoring key US economic indicators, including the Consumer Price Index (CPI) and Producer Price Index (PPI) data, which could provide fresh clues regarding the Federal Reserve’s future policy decisions and determine the next direction for precious metal prices.
