Daijiworld Media Network - Mumbai
Mumbai, Jun 8: Gold and silver prices witnessed a sharp decline on Monday as investors reassessed risk amid rising geopolitical tensions, stronger-than-expected US economic data, and a steep rally in crude oil prices.
On the Multi Commodity Exchange (MCX), gold futures for August delivery came under significant selling pressure, falling nearly 2 per cent during intraday trade. The contract slipped to a low of Rs 1,52,712 per 10 grams before recovering some losses. By afternoon trade, gold was quoted around Rs 1,53,550, remaining more than Rs 2,000 below its previous closing level.
Silver futures for July delivery also recorded substantial losses. The metal traded around Rs 2,41,763 per kilogram, down approximately 3 per cent during the session. Earlier in the day, silver had plunged to an intraday low of Rs 2,39,064, marking a decline of nearly 4 per cent.
Both precious metals had opened the trading session on a weaker note, reflecting cautious investor sentiment across global commodity markets.
The weakness was not limited to domestic exchanges. International markets also saw a broad-based decline in bullion prices, with COMEX gold and silver trading lower as traders reacted to changing expectations surrounding US monetary policy.
Market analysts attributed the sell-off primarily to robust US employment data, which strengthened the view that the US Federal Reserve may maintain higher interest rates for a longer period. Elevated interest rates generally reduce the attractiveness of non-yielding assets such as gold and silver, encouraging investors to shift towards interest-bearing investments.
Although geopolitical uncertainties in West Asia continued to provide some support for safe-haven assets, optimism surrounding potential diplomatic engagement between the United States and Iran tempered demand for precious metals. Investors also appeared less concerned about immediate disruptions to global supply chains and energy markets.
Meanwhile, crude oil prices surged sharply amid regional tensions, further influencing market dynamics. Brent crude climbed close to 4 per cent to trade near $97 per barrel, while US benchmark West Texas Intermediate (WTI) crude rose above $94 per barrel, reflecting growing concerns over energy supplies.
The broader market mood remained cautious across Asia. Major regional indices ended in negative territory, with Japan's Nikkei suffering steep losses, South Korea's KOSPI witnessing a sharp decline, and Hong Kong's Hang Seng Index also trading lower.
Analysts believe commodity markets are likely to remain volatile in the near term as investors closely monitor developments in West Asia, upcoming economic indicators from the United States, and signals from central banks regarding future interest-rate decisions.
With geopolitical uncertainty, fluctuating energy prices, and shifting monetary policy expectations driving sentiment, traders are expected to remain cautious across both precious metals and broader financial markets.