Gold, Silver Prices Plummet on Rising Oil, Stronger Dollar

Gold and silver prices continued their downward trend on Wednesday, September 2, due to rising oil prices, a stronger US dollar, and higher bond yields. According to MCX, gold was trading at ₹1,50,074 per 10 grams, down by ₹1,655 or 1.09%. Silver followed suit, quoted at ₹2,32,097 per kg, declining by ₹3,344 or 1.42%.

Tapan Patel, fund manager - commodities at Tata Asset Management, attributed the decline to geo-economic factors, including the US Treasury's liquidity support measures and rising inflation concerns. He also noted that a softer dollar has improved the attractiveness of precious metals as a store of value.

Patel recommended having exposure to both gold and silver, but with a higher allocation to gold due to its relatively better risk-reward profile. The current market environment is supportive for gold, while sustained investment demand and central-bank buying could provide long-term support.