Gold, Silver Prices Tumble Amid Stronger Dollar and Higher Bond Yields
Gold and silver prices continued to decline on the Multi Commodity Exchange (MCX) on September 2, amidst a stronger US dollar and higher bond yields.
October gold futures were trading at around ₹1.50 lakh per 10 grams, down 1.06%, while September silver futures were at ₹2.32 lakh per kg, lower by 1.38%.
The decline in precious metal prices is linked to changing expectations around US interest rates, with markets now pricing in a 68% probability of a Federal Reserve rate hike this month.
Higher interest rates and bond yields increase the opportunity cost of holding gold and silver, which do not generate interest income.
Renewed US-Iran tensions have added to the pressure, pushing oil prices higher and raising concerns that an energy shock could keep inflation elevated.