Gold and silver prices saw a decline on Monday due to a stronger US dollar and rising inflation expectations, reducing the likelihood of immediate US Fed rate cuts. MCX gold April futures slipped by 0.16% to Rs 1,61,380 per 10 grams, while MCX silver May futures fell by 1.30% to Rs 2,64,799 per kg around 11.10 am.
Earlier in the day, gold futures dropped by 1.1% and silver futures by 1.4% before experiencing a significant recovery. The US dollar surged to a three-month high of 99.34, up by 0.36% intraday, making dollar-priced bullion more expensive for holders of other currencies.
Analysts noted that the increase in US Treasury yields, with 10-year papers hitting a one-month high, raised the opportunity cost of holding non-yielding metals. Meanwhile, crude oil prices rose by approximately 27% to $116 per barrel, the first time both benchmarks surpassed the $100 mark since 2022, driven by escalating tensions in the Middle East and supply disruptions at the Strait of Hormuz.
This surge heightened inflation concerns, leading traders to anticipate that the US Federal Reserve will maintain interest rates at its two-day policy meeting conclusion on March 18. The likelihood of the central bank keeping rates steady in June rose to over 51%, up from below 43% the previous week.
Gold is anticipated to find support at Rs 1,48,000 with resistance at Rs 1,53,000, according to an analyst. In COMEX Gold, there is strong buying interest in the $5,000 support range, and a sustained breakout above $5,400–$5,600 could pave the way for new record highs, as stated by the analyst.
The medium to long-term outlook for silver remains positive amidst favorable global cues from geopolitical events, despite ongoing volatility, according to a market participant.
