Gold and silver prices traded lower during Friday's session. The decline came as the US dollar strengthened and geopolitical risks faded in the Middle East.
Prices Drop on MCX
The February gold futures contract on the Multi Commodity Exchange of India dropped by ₹721. It hit a day's low of ₹1,42,400 per 10 grams.
Meanwhile, the March silver futures contract also fell sharply. It dropped nearly ₹7,000 per kilogram to reach a low of ₹2,84,628. Despite the daily fall, silver remains on track for a strong weekly gain of around 14%.
Geopolitical Tensions Ease
Earlier this week, both metals had surged to fresh historic highs. This rally was driven by protests in Iran and signals from US President Donald Trump about potential military strikes.
The situation changed late on Thursday. President Trump indicated that Tehran's crackdown on protesters was easing. This statement reduced immediate fears of a US military intervention.
Reports also suggested that Israel and several Middle Eastern allies asked the US to delay any attack. They feared retaliatory strikes from Iran on their own countries.
Strong US Dollar Adds Pressure
Beyond geopolitics, the latest US economic data played a key role. Healthy jobs numbers tempered expectations for aggressive interest rate cuts by the US Federal Reserve.
This kept the US dollar index firm around the 99 level. A stronger dollar makes dollar-priced commodities like gold and silver more expensive for holders of other currencies, dampening demand.
Weekly jobless claims came in well below forecasts, pointing to a resilient labour market. Some manufacturing surveys also exceeded expectations.
Expert View on Market Outlook
Jateen Trivedi, VP Research Analyst at LKP Securities, commented on the situation. He noted that ongoing geopolitical uncertainty between the US and Iran continues to support gold prices.
However, he highlighted that the environment remains fluid. Other global flashpoints, including a renewed strategic focus on Greenland, are keeping risk sentiment elevated.
"Gold continues to attract premium safe-haven demand as an alternative to the dollar," Trivedi said.
Looking ahead, he pointed to the upcoming US Federal Reserve policy meeting. "Gold is expected to remain volatile within a broad range of ₹1,41,000 to ₹1,45,000 in the near term," he added.
Additional Factors Influencing Silver
Today's pullback in silver prices had another contributing factor. The Trump administration decided to hold off on imposing import tariffs on critical minerals. This decision removed a potential supply-side support for the metal.
Disclaimer: The views and recommendations mentioned are those of individual analysts or broking companies. They are not endorsed by Mint. Investors are advised to consult certified experts before making any investment decisions.
