The Multi Commodity Exchange (MCX) on Monday recorded a significant downturn in the prices of precious metals. During the trading session, both gold and silver experienced sharp declines, causing a ripple effect across the commodity markets. 40% compared to the previous session. This drop amounted to ₹8,131 per 10 grams, bringing the price down to ₹1,36,694. On the preceding Friday, gold had closed at ₹1,44,825 per 10 grams.
Silver prices mirrored this downward trend with an even more pronounced decline. 64%. On the MCX, silver prices fell by ₹15,747 per kilogram to reach ₹2,11,723. The closing price for silver on Friday was ₹2,27,470 per kilogram. According to market data, a consistent downward trend has been observed in the prices of both metals over the last few trading sessions.
Detailed Analysis of MCX Futures Market Movements
At 11:08 AM on Monday, the futures market for gold and silver showed high volatility. 40% decline in the gold April contract surprised many market participants. Data indicates that from the Friday closing of ₹1,44,825, prices slipped to ₹1,36,694.64% drop brought it to the ₹2,11,723 per kilogram level. According to market experts, a primary reason for this decline is the correction following a period where prices had escalated rapidly. During the initial stages of the conflict, aggressive buying by investors had pushed prices to record highs, leading to the current correction phase.
Spot Gold Rates Across Major Indian Metros
In addition to the futures market, spot gold prices in major Indian cities have also seen adjustments, while in Delhi, 24-karat gold is priced at ₹14,017 per gram, while 22-karat gold stands at ₹12,850 and 18-karat gold at ₹10,517 per gram. In Mumbai, the price for 24-karat gold is ₹14,002 per gram, with 22-karat at ₹12,835 and 18-karat at ₹10,502 per gram. Prices in Kolkata remain identical to those in Mumbai. Chennai continues to report higher rates compared to other cities, with 24-karat gold at ₹14,128 per gram, 22-karat at ₹12,950, and 18-karat at ₹10,800 per gram. In Bengaluru, 24-karat gold is trading at ₹14,002, 22-karat at ₹12,835, and 18-karat gold at ₹10,502 per gram.
International Market Trends and Global Sell-off
According to data from Trading Economics, international gold prices fell below the $4,400 per ounce mark on Monday. Gold is currently facing selling pressure for the fourth consecutive week globally. The ongoing conflict in the Middle East has heightened fears of inflation across the globe, while major economies are under pressure to increase liquidity to mitigate the impact of the war, which may involve the liquidation of gold reserves. This international decline is directly impacting the Indian futures and spot markets.
Geopolitical Tensions and the Strait of Hormuz
On the geopolitical front, the escalating tension between Iran and the United States remains a significant factor in market instability. Donald Trump has issued a warning that if the Strait of Hormuz isn't reopened, he may authorize strikes on Iranian power plants. The Strait of Hormuz is a critical artery for global oil and trade. In response, Tehran has stated that if its energy facilities are targeted, it will retaliate by targeting vital American and Israeli resources in the region. This tense atmosphere has created uncertainty among investors, leading to sharp fluctuations in the commodity markets.
Impact of Federal Reserve Policies and Inflation
S, while federal Reserve raising interest rates by the end of the year. Inflation data remains persistently high, putting pressure on the central bank to maintain a hawkish monetary policy. Higher interest rates typically exert downward pressure on gold prices as they strengthen the dollar and reduce the appeal of non-yielding assets like gold. Currently, the global market is attempting to find a balance between these economic signals and the geopolitical situation, resulting in the sharp decline seen in gold and silver prices.