Gold Silver Prices Volatile on Dollar Yields and Geopolitical Risks

Gold and silver prices are expected to remain volatile this week, influenced by several key factors including the US dollar, bond yields, and ongoing US-Iran tensions. Investors will also closely monitor the Reserve Bank of India's monetary policy decision on Wednesday, with markets anticipating a 25-basis-point rate hike. Additional economic indicators such as Services PMI readings, US trade data, and mid-month consumer sentiment figures will provide further insights.

Last week, gold and silver prices saw significant declines. On the MCX, December gold futures dropped Rs 2,887, or 2%, to close at Rs 1.5 lakh per 10 grams, while silver futures fell Rs 8,819, or nearly 4%, to Rs 2.25 lakh per kg. This decline was driven by a stronger US dollar and rising bond yields, which intensified profit-booking across bullion and other asset classes, according to Jateen Trivedi, VP Research Analyst at LKP Securities.

Internationally, Comex December gold futures fell $158.9, or 3.7%, to $4,162.3 an ounce, while silver dropped $4.38, or 6.7%, to $60.41 an ounce. Pranav Mer, Senior Vice President at JM Financial Services Ltd, noted that gold ended the week with heavy losses, falling more than 3.5% to around $4,160 per ounce, while silver lost over 6.5%, tracking a correction across industrial metals.

The stronger dollar and elevated bond yields remained key headwinds for bullion, alongside broader weakness across commodities and expectations of further rate increases by central banks. Geopolitical developments could introduce fresh volatility, though mixed signals on US-Iran tensions have kept investors cautious. For gold, the direction of the dollar and US Treasury yields will be particularly important, with any sustained move in the dollar above 102 or further rise in yields potentially pressuring prices.