Gold slumps ₹8,089 on MCX; silver hits lower circuit amid inflation fears, strong dollar

Gold prices plunged sharply in futures trade on Monday, with the yellow metal falling ₹8,089 to ₹1.36 lakh per 10 grams, tracking a global selloff driven by rising inflation concerns and a firm US dollar. 

On the Multi Commodity Exchange (MCX), gold contracts for April delivery declined ₹8,089, or 5.6%, to ₹1,36,403 per 10 grams. The sharp drop follows last week’s fall of ₹13,974, or 8.82%, when prices had settled around ₹1.44 lakh per 10 grams. 

Analysts said gold opened with a steep gap-down and may extend its losses for a fourth consecutive week amid persistent macroeconomic pressures. 

Manav Modi, Commodities Analyst at Motilal Oswal Financial Services, said rising inflation concerns and expectations of higher interest rates have continued to weigh on bullion prices despite ongoing geopolitical tensions. 

“Gold prices fell sharply as rising inflation concerns and expectations of higher interest rates continued to weigh on bullion, even as the U.S.-Israel conflict with Iran showed no signs of easing. Over the weekend, tensions escalated after President Donald Trump issued a 48-hour deadline for Iran to reopen the Strait of Hormuz, warning of severe retaliation targeting critical energy infrastructure, while Tehran responded with threats to attack key regional assets and potentially shut the strait entirely,” he said. 

The conflict has now entered its fourth consecutive week, heightening concerns over prolonged disruptions to global energy supply and fuelling fears of energy-driven inflation. 

“These developments have significantly increased concerns over inflation, which has been a major factor dragging gold lower in recent weeks. Markets now expect that sustained high oil prices could force central banks to adopt a more hawkish stance, limiting the appeal of non-yielding assets like gold,” Modi added. 

He noted that market expectations have shifted from multiple rate cuts earlier to a pause and even a marginal probability of rate hikes in upcoming meetings of the Federal Reserve. This follows the Fed’s recent decision to hold rates steady while flagging inflation risks, alongside similar signals from the European Central Bank and the Bank of England, while the Reserve Bank of Australia has already raised rates. 

In the international market, gold futures dropped $486.8, or 9.6%, over the past week to settle at $4,574.9 per ounce. 

Gold prices across major Indian cities 

Gold rates varied across key cities on Monday, with prices in Delhi at ₹1,37,820 for 24 kt, ₹1,26,243 for 22 kt, and ₹1,03,365 for 18 kt, while Mumbai saw rates of ₹1,38,095 for 24 kt, ₹1,26,495 for 22 kt, and ₹1,08,945 for 18 kt. In Kolkata, gold was priced at ₹1,38,802 for 24 kt, ₹1,27,142 for 22 kt, and ₹1,03,571 for 18 kt, whereas in Chennai, rates stood at ₹1,39,038 for 24 kt, ₹1,27,359 for 22 kt, and ₹1,04,279 for 18 kt. In Bengaluru, gold prices were ₹1,37,790 for 24 kt, ₹1,26,215 for 22 kt, and ₹1,03,342 for 18 kt, while in Hyderabad, the metal was priced at ₹1,38,073 for 24 kt, ₹1,26,475 for 22 kt, and ₹1,03,555 for 18 kt. 

Silver prices tumble 

Silver prices also witnessed a sharp decline, hitting their lower circuit limit in futures trade on Monday. 

On the MCX, silver contracts for May delivery plunged ₹20,409, or 9%, to ₹2,06,363 per kilogram amid weak global cues and sustained selling pressure. 

Analysts said the fall in precious metals came despite escalating tensions in West Asia, as broader macroeconomic factors continued to dominate market sentiment. 

Globally, silver futures on Comex for May delivery declined $6.51, or 9.34%, to $63.15 per ounce.