Gold Prices Crash Amid Higher Oil, Rising Bond Yields

Gold and silver prices took a hit on Wednesday morning on the Multi Commodity Exchange (MCX), plummeting over 1% amid rising global tensions and higher oil prices. MCX gold October futures dropped 1.03% to ₹1,50,164 per 10 grams, while MCX silver December futures fell 1.26% to ₹2,32,464 per kg.

The weakness in the Indian markets is in line with international trends, as global bond yields surged due to escalating US-Iran conflict, higher oil prices, and increased rate-hike fears. The US 10-year bond yield jumped to 4.82%, while Japan's 10-year bond yield reached 3% for the first time since 1996.

Ravi Singh, Chief Research Officer at Master Capital Services, noted that markets are now pricing close to a 70% probability of a September Fed rate hike, significantly increasing the opportunity cost of holding gold. Despite the broader debasement theme and strong ETF demand remaining supportive, the near-term combination of higher oil, yields, and Fed hike expectations keeps the bias bearish.