Gold and silver prices slipped on Monday as escalating tensions in West Asia weighed on investor sentiment, driving demand for the US dollar and reducing appetite for precious metals.
Price Movements
On the Multi Commodity Exchange (MCX), gold futures for December delivery declined by 0.3% to ₹58,450 per 10 grams. Silver futures for December delivery also fell 0.5% to ₹70,200 per kilogram.
In the international market, spot gold dropped 0.4% to $1,920 per ounce, while silver fell 0.6% to $23.50 per ounce.
Factors Behind the Decline
The decline in precious metal prices was primarily attributed to the flare-up in tensions in West Asia, which prompted investors to seek refuge in the US dollar. The dollar index rose 0.2% against a basket of major currencies, making gold more expensive for holders of other currencies.
Additionally, rising bond yields added pressure on non-yielding assets like gold. The yield on the 10-year US Treasury note climbed to 4.65%, its highest level in over a week.
Market Outlook
Analysts suggest that gold prices may remain under pressure in the near term as geopolitical uncertainties continue to drive safe-haven flows into the dollar. However, any de-escalation in tensions could trigger a rebound in precious metals.
Investors are also keeping an eye on the upcoming US Federal Reserve meeting, where any hints on interest rate policy could further influence gold and silver prices.
