Gold slips below ₹1.50 lakh, silver falls under ₹2.35 lakh amid strong dollar pressure

Gold and silver prices declined sharply on Wednesday, with gold slipping below the ₹1.50 lakh mark and silver falling below ₹2.35 lakh on the Multi Commodity Exchange (MCX). The decline was driven by a stronger U.S. dollar, expectations that U.S. interest rates could remain elevated for longer, weak physical demand, and continued outflows from exchange-traded funds. The pressure was reflected across both international and domestic commodity markets.

In international trade, COMEX gold fell about 1.25% to around $4,232 per ounce, while silver dropped to nearly $65 per ounce. In India, August-delivery gold on MCX was trading at ₹1,50,180 per 10 grams after falling 1.48%. The contract touched a high of ₹1,50,853 and a low of ₹1,49,500 during the session, compared with the previous close of ₹1,52,443. July-delivery silver declined to ₹2,36,284 per kilogram, after touching a high of ₹2,37,687 and a low of ₹2,33,400 against the previous close of ₹2,38,528.

Market experts attributed the decline to the strength of the U.S. dollar and expectations of a prolonged higher-interest-rate environment. According to commodity market estimates, gold has declined about 3.44% this month, while silver has fallen 11.32%. Analysts noted that investors have increasingly shifted funds toward dollar-based assets, reducing demand for precious metals despite ongoing geopolitical tensions and elevated crude oil prices.

Weak physical demand and sustained ETF outflows have also contributed to the downturn. Gold ETFs have reportedly recorded outflows for four consecutive weeks, with approximately $2.71 billion withdrawn during that period. Market participants also pointed to reduced central bank purchases and weaker retail demand. Data cited by market observers indicated that China purchased eight tonnes of gold last month, while physical demand in India declined significantly during the same period.

Technical indicators suggest that gold has a support zone between $4,100 and $4,000 per ounce, while silver's support range lies between $60 and $56 per ounce. In the domestic market, these levels correspond to approximately ₹1.22 lakh per 10 grams for gold and ₹1.71 lakh per kilogram for silver. Analysts stated that short-term volatility may continue as investors closely monitor global interest rate expectations, currency movements, ETF flows, and demand trends.