Gold and silver prices dropped sharply in domestic futures trading on Friday, October 23, driven by weaker spot demand and selling pressure. Rising crude oil prices and concerns over prolonged high US interest rates added to the downward pressure on precious metals. On the Multi Commodity Exchange (MCX), silver futures for December delivery tumbled ₹4,191, or 2.1%, to ₹1.95 lakh per kg, while gold futures for the same delivery month fell ₹1,230, or 0.86%, to ₹1.42 lakh per 10 grams.
Internationally, silver prices declined 1.01% to $54.01 per ounce, and gold futures dropped 0.26% to $4,014.23 per ounce in New York. Analysts attributed the declines to rising crude oil prices, which have intensified inflation concerns and increased expectations that the US Federal Reserve may maintain elevated interest rates for longer. Higher interest rates typically weigh on gold and silver, as they do not generate interest income, making them less attractive compared to interest-bearing assets.
Investors are closely watching the US Federal Reserve's upcoming meeting on October 27-28 for signals on the interest-rate outlook. Meanwhile, crude oil prices have risen due to escalating tensions in West Asia and concerns over potential disruptions to global supplies following attacks on Saudi energy infrastructure. Despite near-term volatility, experts note that gold and silver continue to hold long-term appeal as trusted stores of value.
In India, festive and wedding-related purchases could support gold and silver consumption, even as international market movements influence prices. However, domestic bullion prices are also affected by the rupee-dollar exchange rate and local demand. A weaker rupee can increase the cost of imported precious metals, potentially keeping domestic prices elevated even when global prices decline. Retail buyers should be aware that MCX futures prices may not directly translate into equivalent changes in jewellery prices, which also depend on factors like purity, taxes, and dealer margins.