Gold prices dropped nearly 1% and silver fell over 2% on MCX as a stronger US dollar and expectations of multiple Federal Reserve rate hikes weighed on precious metals.
Key Highlights:
- Gold fell nearly 1% while silver dropped over 2% on MCX.
- Stronger US dollar and rising Treasury yields pressured bullion prices.
- Gold lost nearly 10% and silver almost 15% during June.
- Markets are pricing in multiple US Fed rate hikes this year.
- Investors await US employment data and Fed policy signals.
News Story:
New Delhi, July 1: Gold and silver prices witnessed a sharp decline on Wednesday as a stronger US dollar, rising Treasury yields and expectations of additional US Federal Reserve interest rate hikes continued to weigh on precious metals.
On the Multi Commodity Exchange (MCX), gold futures for August delivery slipped nearly 1% to around ₹1.41 lakh per 10 grams, while silver futures for September delivery declined by more than 2% to approximately ₹2.24 lakh per kilogram during early trade.
The correction follows a weak June performance for bullion. Domestic spot gold prices fell by about ₹15,100 per 10 grams, nearly 10%, during the month, while silver prices declined by approximately ₹38,250 per kilogram, or nearly 15%, reflecting reduced investor demand amid tightening global monetary expectations.
Market sentiment has been impacted by the continued strength of the US dollar, making gold and silver more expensive for overseas buyers. Investors are also anticipating further interest rate hikes by the US Federal Reserve later this year as inflation concerns remain elevated.
Analysts are closely watching upcoming US employment data and comments from Federal Reserve officials, which could provide fresh direction for interest rate policy and global commodity markets.
Experts believe gold may remain under pressure in the near term unless the dollar weakens or geopolitical risks increase significantly. Meanwhile, traders are monitoring key technical support and resistance levels for both gold and silver on the MCX.
