Gold Drops ₹3,266 and Silver Slips ₹7,725 as US Dollar Surge Pressures Precious Metals
Summarized by AI; it may make mistakes. Check important info
Summarized by AI; it may make mistakes. Check important info
Bullion markets experienced a sharp downturn in the trading week ending 25 September, as a stronger US dollar and elevated benchmark bond yields squeezed non-yielding assets. Despite a minor festive bounce during Anant Chaturdashi celebrations on Friday, domestic gold fell 2.12 per cent—losing ₹3,266 per 10 grams—while silver slid 3.19 per cent with a loss of ₹7,725 per kg across the week.
Even with the pullback, prices remain elevated compared to historical averages. Multi Commodity Exchange (MCX) October gold futures closed at ₹150,924 per 10 grams, keeping the metal within distance of its all-time high of ₹163,437 reached in late August. Year-on-year figures show domestic gold trading more than 16 per cent higher, driven by persistent safe-haven demand.
Hawkish Fed Stance Drives Gold Downward
Gold recorded its largest weekly contraction in a month, reversing previous gains after hawkish statements from the US Federal Reserve indicated that benchmark interest rates would remain elevated for an extended period.
• MCX Gold Futures: Slipped 2.12 per cent (losing ₹3,266 per 10 grams) to close at ₹150,924 per 10 grams.
• Domestic Retail 24K Gold: Dropped 2.12 per cent (down ₹3,280 per 10 grams) from ₹154,940 to settle at ₹151,660 per 10 grams.
• International Spot Gold: Lost 2.15 per cent (down $93.60 per ounce) to finish around $4,267.13 per ounce.
• COMEX Gold Futures: Fell 2.27 per cent (down $99.70 per ounce) to settle at $4,286.20 per ounce.
Industrial Weakness Compounds Silver Slide
Silver posted heavier losses than gold over the five-day trading window, pulled down by broader sluggishness in industrial metal markets and reduced risk appetite among traders.
• MCX Silver Futures: Fell 3.19 per cent (losing ₹7,725 per kg) to close at ₹234,175 per kg.
• Domestic Retail Silver: Shed 3.19 per cent (down ₹7,710 per kg) from ₹241,900 to finish at ₹234,190 per kg.
• International Spot Silver: Declined 3.22 per cent (losing $2.12 per ounce) to close at $63.64 per ounce.
• COMEX Silver Futures: Slipped 3.10 per cent (down $2.05 per ounce) to settle near $64.15 per ounce.
US Treasury Yields and Macroeconomic Factors Pressing Prices
The primary driver of the sell-off across international commodity exchanges was the surge in 10-year US Treasury yields, which held near 19-year highs at 5.22 per cent. High yield returns, combined with a strengthening US dollar index, significantly dimmed the appeal of holding zero-yielding assets like precious metals.
In Indian spot markets, physical retail buying during Ganesh Visarjan and seasonal festivities provided a temporary floor on Friday, preventing a further break through technical support levels. Market analysts emphasized that domestic festival demand alone cannot offset global macroeconomic headwinds without a sustained pullback in US Treasury yields.
