Mumbai, June 11: Gold and silver prices witnessed a sharp decline on Thursday, with both precious metals coming under pressure as investors assessed the latest developments in the escalating conflict in West Asia and shifted focus towards global interest rate expectations.
On the Multi Commodity Exchange (MCX), gold futures for August delivery fell by as much as one per cent during intraday trading, touching a low of Rs 1,46,444 per 10 grams. By noon, the yellow metal was trading at Rs 1,47,860, down Rs 157 or 0.11 per cent from the previous close.
Silver futures for July delivery also remained weak. The white metal touched an intraday low of Rs 2,30,493 per kilogram, marking a decline of more than two per cent during the session. Around midday, silver was trading at Rs 2,34,500, down Rs 1,005 or 0.43 per cent.
The decline mirrored trends in international markets, where precious metals continued to face selling pressure. COMEX gold was trading lower at $4,105.30 per ounce, while COMEX silver fell to $63.90 per ounce.
Commodity market analysts attributed the weakness in bullion prices to changing investor sentiment following recent developments in the West Asia conflict. Market participants appeared to reduce their demand for traditional safe-haven assets after reports indicated that the latest round of US military strikes on Iran had concluded, raising hopes of renewed diplomatic engagement.
Gold and silver are generally viewed as safe-haven investments during periods of geopolitical uncertainty. However, when fears of prolonged conflict ease, investors often shift funds towards riskier assets, reducing demand for precious metals.
Analysts also pointed to expectations that interest rates in the United States may remain elevated for a longer period. Higher interest rates typically reduce the attractiveness of non-yielding assets such as gold and silver because investors can earn better returns from interest-bearing instruments.
Inflation concerns remain another key factor influencing market sentiment. Rising energy prices linked to geopolitical tensions have renewed concerns about inflationary pressures, which could affect future policy decisions by the US Federal Reserve.
While precious metals weakened, crude oil prices moved sharply higher amid concerns over energy supplies and regional instability.
Brent crude oil rose more than two per cent to trade near $95 per barrel, while US West Texas Intermediate (WTI) crude gained around four per cent to reach $93.64 per barrel.
The contrasting movement between bullion and oil highlights the uncertainty currently prevailing in global commodity markets. While investors appear less inclined to seek refuge in gold and silver for the moment, concerns about energy supplies and transportation routes continue to support higher oil prices.
Market observers noted that future movements in precious metals are likely to depend on the trajectory of the West Asia conflict, developments in global inflation, and signals from major central banks regarding interest rate policy.
For Indian consumers and investors, the correction in gold and silver prices could provide an opportunity for fresh purchases, particularly ahead of the upcoming festive and wedding season, although volatility is expected to persist in the near term.
