Gold Drops ₹1,100, Silver Falls ₹5,000 as Crude Prices Near $100

Gold prices witnessed a sharp decline on Monday , while silver extended its losses, as soaring crude oil prices and renewed inflation concerns dampened investor appetite for precious metals. The downturn reflects a shift in market sentiment, with traders increasingly focusing on the possibility of prolonged high interest rates rather than the traditional safe-haven appeal of bullion.

In the national capital, gold of 99.9 per cent purity fell by ₹1,100 , settling at ₹1,58,800 per 10 grams , including taxes. The precious metal had closed at ₹1,59,900 per 10 grams in the previous trading session. Silver also remained under pressure, declining by ₹5,000 to ₹2,55,700 per kilogram , compared to its earlier close of ₹2,60,700 per kg.

Market experts attributed the weakness in bullion prices to a combination of stronger-than-expected US economic data and a sharp rise in global crude oil prices . The robust US economic indicators have reinforced expectations that interest rates could remain elevated for longer , reducing the attractiveness of non-yielding assets such as gold and silver.

Analysts noted that higher energy prices are reviving fears of persistent inflation across major economies. While gold is traditionally viewed as a hedge against inflation, rising price pressures can also prompt central banks to maintain tighter monetary policies , increasing borrowing costs and strengthening the US dollar. This often weighs on demand for precious metals.

Adding to market uncertainty are ongoing geopolitical tensions in West Asia , which continue to fuel volatility across global financial markets. Investors are closely monitoring developments in the region as they assess the broader implications for energy supplies, inflation and economic growth.

The weakness was also visible in international markets. Spot gold declined nearly one per cent to USD 4,291.79 per ounce , while silver slipped 1.34 per cent to USD 66.93 per ounce . Meanwhile, crude oil prices surged almost 5 per cent , climbing to USD 97.44 per barrel , intensifying concerns about rising input costs and inflationary pressures worldwide.

According to market observers, the latest fall in bullion prices follows a strong US jobs report that reinforced expectations of higher interest rates. A firmer dollar and elevated bond yields have encouraged investors to move funds away from precious metals, leading to fresh selling pressure.

Despite the near-term weakness, experts maintain that gold remains a crucial long-term hedge against inflation and economic uncertainty . However, they caution that prices are likely to remain volatile in the coming weeks as markets await key US inflation data and further signals from the Federal Reserve regarding its policy direction.

For now, the interplay between inflation fears , interest rate expectations and geopolitical developments is expected to keep bullion markets on edge, with traders closely tracking economic indicators that could influence the outlook for precious metals.