Gold and Silver Prices Dip on Strong Dollar and Rising Yields

Gold and silver prices dropped on the Multi Commodity Exchange (MCX) as a stronger US dollar and rising Treasury yields put pressure on the metals. However, losses were limited by reduced expectations of a Federal Reserve interest rate hike in October. Gold futures for December 2026 delivery fell by Rs 415 to Rs 1,49,901 per 10 grams, marking a Rs 1,500 decline over two days. Silver futures for the same delivery date rose by Rs 1,000 to Rs 2,25,127 per kg.

The US dollar remained strong, making gold and other dollar-denominated commodities more expensive for foreign investors. Meanwhile, yields on 10-year and 30-year US Treasury bonds hit 24-year highs on Monday, further impacting sentiment. The probability of a US rate hike in December stands at 87%, according to CME's FedWatch Tool, which would raise the opportunity cost of holding non-yielding gold.

Data released on Friday showed slower-than-expected US job growth in September, weakening expectations of a rate hike this month. Additionally, activity in the US services sector slowed in September, with supply chain issues pushing input prices to their highest level in over four years, suggesting inflation may persist into 2027.

In international markets, spot gold fell 0.3% to $4,128.69 per ounce, while US gold futures were little changed at $4,156.00. Other precious metals also declined, with spot silver down 0.6% to $60.67 per ounce, platinum falling 0.7% to $1,710.08, and palladium easing 0.2% to $1,170.15.

Manoj Kumar Jain of Prithvi Finmart advised traders to wait for market stability before taking new positions, while long-term investors could consider accumulating gold and silver during the current dip. On the MCX, gold has support at Rs 1,48,800-1,48,100 and resistance at Rs 1,49,900-1,50,350, while silver has support at Rs 2,24,400-2,22,000 and resistance at Rs 2,27,700-2,29,500.