Silver and Gold prices in India declined on Monday, March 30, as rising crude oil prices and a stronger U.S. dollar weighed on investor sentiment and reduced expectations of interest rate cuts by the U.S. Federal Reserve.
On MCX, silver price fell 0.5% to ₹2,26,798 per kg while gold price lost 1.5% to ₹1,42,100 per 10 grams.
In international markets, spot silver fell 1.3% to $68.67 per ounce, while spot gold declined 0.6% to $4,466.99 per ounce as of 0238 GMT. U.S. gold futures for April delivery also dropped 0.6% to $4,496.30.
Other precious metals, however, showed some resilience. Spot platinum rose 0.3% to $1,868.11, while palladium gained 1% to $1,391.
Reasons behind the fall
The decline in precious metals was largely driven by a sharp rise in crude oil prices, which has intensified inflation concerns globally. Brent crude surged above $115 per barrel after Yemeni Houthis launched attacks on Israel over the weekend, further escalating the ongoing conflict. The contract has risen 60% in March, marking a record monthly increase.
The surge in oil prices has raised fears that inflation could remain elevated, thereby reducing the likelihood of monetary easing. Traders are now pricing in minimal chances of a U.S. rate cut this year, a sharp shift from earlier expectations of two rate cuts before the conflict began.
A stronger U.S. dollar also added pressure on bullion prices. The dollar has appreciated more than 2% since the U.S.-Israeli war on Iran began on February 28, making gold and silver more expensive for holders of other currencies and dampening demand.
Geopolitical developments have further added to uncertainty. U.S. President Donald Trump stated in an interview with the Financial Times that he wants to “take the oil in Iran” and could potentially seize the export hub of Kharg Island, signalling a more aggressive stance that could prolong the conflict and keep energy prices elevated.
Although gold is traditionally viewed as a hedge against inflation, the current environment presents a challenge. Elevated interest rates reduce the appeal of non-yielding assets like gold, offsetting the positive impact of inflation and keeping prices under pressure.
more to come…..