MCX Commodities Slide on Hawkish Fed Prospects and Easing West Asia Tensions

Commodity prices on the Multi Commodity Exchange (MCX) fell across the board on Tuesday, with every contract trading in the red. The entire metals and energy complex was affected by the decline, led by silver and crude oil. Silver prices dropped 1.40% to ₹2,18,071 per kg, a fall of ₹3,102, while crude oil slid 1.58% to ₹7,831 per barrel, lower by ₹126.

Gold prices also slipped, down 0.60% to ₹1,42,201 per 10 grams, a loss of ₹862. Base metals like copper, zinc, and aluminium were also affected, with copper easing 0.53% to ₹1,329.50 per kg, zinc falling 0.54% to ₹377.65, and aluminium down 0.50% at ₹340.20.

Natural gas lost 0.79% to ₹262.40 per mmBtu. The decline in commodity prices can be attributed to the prospect of a hawkish US Federal Reserve, which has led markets to price in a meaningful chance of a rate increase this week. This would lift real yields and the dollar, both of which work against precious metals.

The easing of tensions in West Asia after President Donald Trump's signal of progress in talks with Iran to end the conflict also contributed to the decline in commodity prices. The war premium has been pulled out of crude oil, reducing the edge off the energy-led inflation trade that had been supporting the wider commodity basket.