Gold and silver prices continued their decline for a second consecutive day on the Multi Commodity Exchange on Tuesday, driven by increasing oil prices that heightened inflation concerns and bolstered expectations for further interest rate hikes by the Federal Reserve. In the domestic market, MCX silver futures for September 2026 delivery experienced a decline of Rs 1,542, bringing the price to Rs 2,25,900 per kg. Gold futures for October 2026 delivery decreased by Rs 235, settling at Rs 1,46,569 per 10 grams. In the course of two sessions, the price of gold has decreased by Rs 4,300, whereas silver has experienced a decline of nearly Rs 9,000. Officials from the US and Iran engaged in discussions with mediators, marking a renewed attempt to resolve the ongoing seven-month conflict, according to representatives from both nations.
Oil prices experienced an increase for the second consecutive session, driven by ongoing apprehensions regarding potential supply disruptions in the Middle East. Increased oil prices have the potential to contribute to inflation by elevating costs throughout the economy, which may lead central banks to maintain elevated interest rates in an effort to manage price pressures. Gold has long been regarded as a safeguard against inflation; however, elevated interest rates typically exert downward pressure on the metal, as investors gravitate toward assets that provide returns. Markets currently assign a 70.3% probability to a Federal Reserve rate hike in October, as indicated by the CME’s FedWatch Tool.
Fed Governor Lisa Cook indicated that she anticipates inflationary pressures to continue in the upcoming months, influenced by demand related to AI and elevated oil prices, though she refrained from suggesting that additional rate hikes would be required. Spot gold remained relatively stable at $4,124.57 per ounce as of 0140, following a decline to its lowest level since August 5 in the prior session. US gold futures declined by 0.3%, settling at $4,156.70. Among other precious metals, spot silver fell 0.6% to $60.62 an ounce, platinum declined 1% to $1,699.86, and palladium slipped 0.5% to $1,209.08. Manoj Kumar Jain indicated that following the breach of significant support levels, gold and silver prices are expected to face downward pressure, with gold possibly testing the range of 4,110-4,040 and silver between 60-59.10 per troy ounce in the near term.
In domestic markets, gold concluded at a level beneath Rs 1,47,700 per 10 grams, whereas silver finished below Rs 2,28,000 per kilogram. On the MCX, gold could test Rs 1,44,000-1,41,400, while silver may decline toward Rs 2,24,000-2,20,000 in the short term, Jain stated. He noted that any favourable progress in the US-Iran peace negotiations could bolster prices, whereas in the absence of such advancements, prices are expected to remain constrained. Jain advised traders to refrain from establishing long positions in gold and silver until there is greater clarity regarding the US-Iran peace negotiations. For long-term investors, he stated that the present market downturn may serve as an opportunity to accumulate via the SIP method.
