Gold and Silver Prices Plummet on MCX Amid Profit-Taking, Hawkish Fed Comments

Gold and silver futures fell sharply on the Multi-Commodity Exchange (MCX) on Monday, dropping by around two percent. The decline was driven by a combination of factors, including profit-taking, hawkish Federal Reserve commentary, surging crude oil prices, and a stronger US dollar.

The MCX gold futures contract with October 5 expiry plummeted 1.69 percent to trade at Rs 1,53,640 per 10 grams, while the silver futures contract with September 4 expiry fell 1.77 percent to trade at Rs 2,32,501 per kilogram.

The recent rally in precious metals, which saw gold and silver prices push higher in the second half of August, may have triggered profit-taking among institutional funds and retail participants. This move is expected to have contributed to the decline on the MCX.

Additionally, Federal Reserve Chair Kevin Warsh's hawkish signals at the Jackson Hole economic symposium over the weekend reinforced expectations of tighter policy ahead of a September meeting. This reduced the appeal of non-yielding assets like gold and silver, leading investors to reassess their positions across interest-rate-sensitive assets.