Gold and silver prices saw a significant decline on Wednesday, both falling by over 1% due to increasing worries about higher US interest rates. On the Multi Commodity Exchange (MCX), gold futures for June 5 dropped by 0.7% to hit an intraday low of Rs 1,57,959, while silver futures for July 3 slipped by 1.21% to Rs 2,66,850.
The yellow metal was trading at Rs 1,58,369, down 0.45%, and the white metal at Rs 2,68,970, down 0.43%. Gold opened at Rs 1,58,974 and silver at Rs 2,67,230 on the MCX earlier in the day. In the international market, COMEX gold fell by 0.49% to $1,462 per ounce, and COMEX silver dropped by 0.17% to $73.868 per ounce.
Market experts attribute the pressure on gold prices to rising inflation risks and the potential for increased US interest rates. Geopolitical tensions, including US-Iran conflict, have also impacted sentiment, affecting global inflationary pressures due to disruptions in shipping through the Strait of Hormuz.
Analysts mention that concerns about inflation have diminished expectations of US Federal Reserve rate cuts, leading to speculations about possible rate hikes later this year. For silver, experts note that recent gains driven by optimism in AI-related stocks and growing demand from data-center infrastructure expansion have been erased.
On the domestic front, benchmark indices Sensex and Nifty opened lower on Wednesday, trading in negative territory during early sessions.
