Gold falls to 11-week low, silver sinks as traders brace for tighter Fed policy – Firstpost

Gold prices slipped below the Rs 1.5 lakh mark in India on Wednesday, while silver extended its losses, as a stronger US dollar and growing expectations of higher US interest rates triggered a broad selloff in global bullion markets.

On the Multi Commodity Exchange (MCX), gold futures for August 2026 delivery fell Rs 2,523, or 1.66 per cent, to Rs 1,49,920 per 10 grams during morning trade. Silver futures for July 2026 delivery dropped Rs 3,881, or 1.63 per cent, to Rs 2,34,647 per kilogram.

The decline comes after several sessions of weakness in precious metals, with investors increasingly moving away from bullion as rising bond yields and a stronger dollar make other assets more attractive.

Global prices hit multi-week lows

The weakness in domestic prices mirrored losses in international markets, where gold fell to its lowest level in nearly 11 weeks.

Spot gold traded around $4,181 per ounce after dropping nearly 2 per cent in the previous session, while US gold futures for August delivery slipped to around $4,205 per ounce. Silver also remained under pressure, trading close to $64 per ounce.

Analysts said the main driver behind the selloff has been a shift in expectations surrounding US monetary policy.

Market participants are increasingly betting that the US Federal Reserve could keep interest rates elevated for longer, or even raise rates again later this year, following a string of stronger-than-expected economic data releases.

Strong dollar weighs on bullion

A stronger US dollar has further added to pressure on gold and silver prices.

Since bullion is priced in dollars, a stronger greenback makes gold more expensive for buyers holding other currencies, reducing demand in international markets.

At the same time, rising US Treasury yields have increased the appeal of fixed-income assets. Gold, which does not offer interest or dividends, tends to lose attractiveness when bond yields rise.

US-Iran conflict fuels inflation concerns

The latest correction in bullion prices has also unfolded against the backdrop of escalating tensions between the United States and Iran.

While geopolitical uncertainty usually boosts safe-haven demand for gold, investors are focusing instead on the inflationary impact of the conflict. Rising crude oil prices have raised concerns that inflation could remain elevated, potentially forcing central banks to maintain tighter monetary policies.

That has limited gold’s traditional role as a refuge during periods of geopolitical stress.

Silver under sharper pressure

Silver has underperformed gold in recent sessions as concerns over global economic growth added to selling pressure.

Unlike gold, silver has significant industrial uses in sectors such as electronics, solar energy and manufacturing. Any slowdown in economic activity can affect demand expectations for the metal.

As a result, silver prices have fallen more sharply than gold over the past week.

Other precious metals also remained weak. Platinum and palladium recorded losses as investors reduced exposure across the broader metals complex.