Sharp Decline in Gold Prices: MCX Gold Plummets 6% as Dollar Strengthens
Chennai: Bullion prices witnessed a ‘bloodbath” on Wednesday as US dollar firmed up and crude oil prices spurted with escalating tensions in the Middle East.
MCX Gold futures crashed by over Rs 9,180, a staggering 6 per cent decline to Rs 1,43,844 per 10 gm. In the COMEX, gold dived below $4,600 per ounce. The sell-off was ignited by the US Federal Reserve’s hawkish “higher-for-longer” interest rate stance, which sent US 10-year Treasury yields surging to 4.25 per cent. Fed projects only one rate cut despite persistent inflation concerns and this strengthened the US dollar.
The massive spike in the US Dollar Index to 100.50 saw investors moving towards the safe-haven greenback.
In the Indian physical market, discounts hit a decade-high of $83/oz as retail buyers remained sidelined by extreme volatility. In the New Delhi market, gold dropped by Rs 7,000 to Rs 1.53 lakh per 10 gm.
“If current momentum persists, the next technical floor is expected near Rs 1,40,000, as physiological support as market brace for continued pressure from escalating West Asia tensions and surging energy costs,” said Kedia Commodities.
With COMEX Gold diving below $4,600/oz to $4555, this widespread long liquidation marks a significant shift in market sentiment. If current momentum persists, the next technical floor is expected near ₹1,40,000, as physiological support as market brace for continued pressure from escalating West Asia tensions and surging energy costs.
On MCX, silver futures for May delivery slumped Rs 16,534, or about 6.7 per cent, to settle at Rs 2,31,660 per kg. During the session, the metal hit an intraday low of Rs 2,29,234 per kg. Silver in the international market fell to $67.9, a drop of 9.82 per cent and in the New Delhi spot market, silver prices tanked Rs 17,800 to Rs 2.38 lakh per kg.
