Gold and Silver Prices Drop in India Amid Stronger Dollar and Elevated Yields
Gold and silver prices in India experienced a decline on October 5, 2026, driven by muted demand and broader market pressures. On the Multi Commodity Exchange (MCX), gold futures for December delivery dropped by Rs 1,020, or nearly 1%, to Rs 1,49,370 per 10 grams. This follows a 2% fall during the previous week, with domestic markets closed on Friday for Mahatma Gandhi Jayanti.
The downward trend was attributed to a stronger US dollar and elevated bond yields, which have restricted gold's upward momentum. The dollar index hovered close to an 18-month high of 102.37, exacerbating pressure on bullion. Internationally, Comex gold futures for December delivery were marginally higher at $4,163.50 per ounce, but gold has managed to stay above $4,150 per ounce after briefly surpassing $4,200 on Friday.
Analysts noted that while a weak US jobs report lowered expectations of an October rate hike by the Federal Reserve, markets still assign a 70% probability to a rate hike in December. Silver also saw a sharp fall, declining 6.7% last week to $60.41 per ounce. The recovery in bullion remains constrained by elevated US Treasury yields, which were holding around 5.2% amid persistent inflation and fiscal concerns.
Market participants are now focusing on upcoming economic indicators, including Services PMI readings, US trade data, and mid-month consumer sentiment figures, for fresh direction. The unresolved US-Iran situation could also contribute to volatility in precious metals.