Gold, silver prices fall on global weakness, rising crude oil prices

Gold and silver prices declined in domestic futures trade on Monday, tracking weakness in global markets amid a strengthening U.S. dollar and a sharp rise in crude oil prices that stoked inflation concerns. 

Gold futures slipped on MCX 

On the Multi Commodity Exchange (MCX), gold futures slipped 0.78% to ₹1.51 lakh per 10 grams of 24-karat purity while silver futures fell 2.27% to ₹2.37 lakh per kilogram. 

The fall in domestic bullion mirrored global trends, with spot gold declining 0.7% to $4,717 per ounce, its lowest level in nearly a week. U.S. gold futures for June delivery were also down 1% at $4,739 an ounce. 

Market sentiment weakened as the dollar index strengthened, making dollar-denominated bullion more expensive for holders of other currencies. At the same time, crude oil prices surged above $100 per barrel, intensifying inflation worries. 

Spike in oil prices 

The spike in oil prices follows raging tensions in West Asia after U.S.-Iran ceasefire talks failed to yield a resolution. Reports of a potential U.S. naval blockade of the Strait of Hormuz, a key global oil transit route, have heightened fears of supply disruptions, further pushing up crude prices. 

“Gold prices eased after posting a weekly gain as U.S.-Iran talks failed over the weekend and tensions around the Strait of Hormuz escalated,” said Manav Modi, Commodities Analyst at Motilal Oswal Financial Services Ltd. He added that while a temporary truce announcement had initially improved sentiment, lingering uncertainties and continued geopolitical risks have kept investors cautious. 

Modi said that rising energy prices have already begun reflecting in U.S. inflation data, with March consumer price inflation showing a sharp uptick. Although core inflation remained relatively stable, elevated headline inflation has complicated the outlook for U.S. Federal Reserve policy, reinforcing expectations of a prolonged higher interest rate environment. 

“Gold remains caught between geopolitical support and macroeconomic headwinds,” he said, adding that price movements will be influenced by inflation trends, interest rate expectations, and developments in the Middle East. 

Investors are now closely watching key economic indicators, including India’s inflation data and U.S. existing home sales figures, for further cues on market direction.