Gold prices declined on the Multi Commodity Exchange (MCX) on Tuesday, with June futures contracts falling ₹1,400, or nearly 1%, to ₹1,48,298 per 10 grams during early trading sessions.
Silver also faced selling pressure, with May contracts on MCX dropping over ₹2,800, or more than 1%, to ₹2,29,651 per kilogram.
The decline in precious metal prices was driven by multiple headwinds in global markets. A stronger US dollar made gold more expensive for international buyers, dampening demand for the yellow metal. Geopolitical tensions between the US and Iran added to market volatility, though their immediate impact on prices remained mixed.
A more significant factor weighing on gold was robust US employment data, which reduced expectations of near-term interest rate cuts by the Federal Reserve. Stronger-than-expected job creation suggests the US economy remains resilient, potentially keeping the Fed on a higher-for-longer interest rate trajectory. This is unfavorable for non-yielding assets like gold, as higher rates increase the opportunity cost of holding the precious metal.
Investors are closely monitoring upcoming economic data and central bank commentary for cues on future monetary policy direction. For Indian investors, the combination of rupee movements and global gold prices will continue to influence domestic precious metal valuations in the coming sessions.
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