Gold and Silver Prices Decline Amid Rising Inflation Concerns
Weak Start for Precious Metals on MCX
On Monday, March 9, precious metal prices opened lower on the Multi Commodity Exchange of India (MCX), with both gold and silver witnessing significant drops in early trading. The decline was attributed to a stronger US dollar, which diminished the attractiveness of dollar-denominated bullion for international buyers. Concurrently, rising energy costs have sparked worries about increasing inflation globally, leading investors to temper their expectations regarding imminent interest rate reductions, thereby exerting further pressure on precious metals. Despite ongoing geopolitical tensions in the Middle East that typically bolster safe-haven assets like gold, macroeconomic factors have taken precedence in shaping market sentiment.
Gold and Silver Futures Experience Decline
Gold futures for April 2026 delivery on MCX fell by over Rs 1,808, approximately 1.1%, settling at Rs 1,59,826 per 10 grams during the initial trading session. Silver futures for May 2026 also mirrored this trend, dropping Rs 3,538, or about 1.3%, to Rs 2,64,747 per kilogram. The downturn in domestic prices reflected the weakness observed in international bullion markets, where metals faced selling pressure due to currency fluctuations and changing interest rate expectations.
International Bullion Prices Decline
In the global market, gold prices also saw a decrease in early trading. Spot gold fell by 1.7% to $5,082.51 per ounce, while US gold futures for April delivery dropped 1.4% to $5,099.40 per ounce. The US dollar reached its highest point in over three months, making gold pricier for buyers using other currencies and reducing demand for the precious metal. Silver prices also declined, with spot silver down 2.2% to $82.50 per ounce. Tim Waterer from KCM Trade noted that with oil prices nearing $110 per barrel and inflation risks escalating, the probability of rate cuts has become less certain, leading to a correction in gold prices.
Analysts Predict Ongoing Volatility
Market analysts anticipate that precious metals will continue to experience significant price fluctuations in the near future. Manoj Kumar Jain from Prithvi Finmart indicated that both gold and silver are currently undergoing sharp price swings, resulting in increased volatility in the precious metals market. However, he mentioned that silver might maintain its support level at $74 per troy ounce, while gold could find support around $4,940 per troy ounce on a closing basis this week. Jain expects both metals to remain volatile due to variations in the dollar index, the ongoing U.S.-Iran conflict, and uncertainty in global financial markets.
According to Jain, gold has immediate support in the range of $5,115 to $4,964 per troy ounce, with resistance levels between $5,220 and $5,255. For silver, support is seen between $80.80 and $76.60 per troy ounce, while resistance levels are positioned at $88 to $91.40 during the current trading session. He advised traders to operate within these ranges and adopt a buy-on-dips strategy. For long-term investors, Jain recommended gradually accumulating gold and silver during price corrections.