National News
MCX gold rate falls below Rs.1.61 lakh, silver slips 1% on strong dollar
Rising US Dollar Index and higher US 10‑Year Treasury Yield weigh on bullion as Multi Commodity Exchange gold dips below ₹1.61 lakh and silver declines despite ongoing US–Iran tensions.
Gold and silver prices in India opened lower on Monday, following weakness in international bullion prices as a stronger dollar weighed on the prices of precious metals.
MCX gold rate today for April futures contracts opened 0.6% lower at Rs. 1,60,651 per 10 grams as against its previous close of Rs.1,61,634 level. MCX silver price for May futures contracts opened 0.29% lower at Rs. 2,67,497 per kilogram as against its previous close of Rs. 2,68,285 level. Selling pressure intensified and MCX gold and MCX silver prices were trading over 1%3.1 Dollar Strength
The US Dollar Index (DXY) rose to 99.695, hovering near a three-month high reached the prior week. Since bullion is priced in dollars globally, a stronger greenback makes gold and silver more expensive in local currencies, suppressing international demand and exerting downward pressure on prices.
US 10-year Treasury yields climbed to a near one-month high, elevating the opportunity cost of holding non-yielding assets such as gold. Investors rotating into higher-yielding fixed-income instruments contributed to the sell-off in precious metals.
A sharp rise in crude oil prices has reignited inflation concerns, causing markets to revise downward their expectations for near-term interest rate reductions by the US Federal Reserve. Delayed rate-cut prospects are bearish for gold, which typically benefits from lower real interest rate environments.
The ongoing US-Iran conflict in the Middle East escalated further during the reporting period. Iran named Mojtaba Khamenei to succeed his father Ali Khamenei as supreme leader, adding an additional layer of geopolitical uncertainty. Paradoxically, while geopolitical risks are traditionally positive for safe-haven assets like gold, the stronger dollar and rate-cut repricing dominated market sentiment, offsetting any safe-haven premium.
In the domestic market (MCX), gold and silver have hit unprecedented levels. Gold is currently hovering near the Rs. 1.53 lakh per 10-gram mark, while MCX silver has surged past Rs. 2.45 lakh per kg.
On the global stage, the momentum is slightly more restrained due to a powerhouse US Dollar, which has climbed to 99.3.
- Spot Gold: Trading marginally higher above $4,710 per ounce.
- Spot Silver: Initially rose to $76 per ounce before facing pressure and slipping toward the $75.6 range.
Crude Oil: Fueling Inflation Fears
As the conflict enters its ninth week, energy markets are on edge. Brent Crude has breached $106 per barrel, while US WTI rose above $95. These prices reflect the severe supply risk posed by the effective closure of the Strait of Hormuz, a critical chokepoint for global oil transit.
The failure of a second round of peace talks has dashed hopes for a swift resolution.
- Diplomatic Collapse: President Trump cancelled a high-profile meeting in Pakistan that was intended to bring US and Iranian envoys to the table.
- The Naval Standoff: Tehran refuses to negotiate while the US Navy blockade remains in place.
- The Nuclear Factor: While Iran expressed a willingness to reopen the Strait of Hormuz, they have shown no intent to abandon their nuclear program—a non-negotiable demand for Washington.
Investors are now bracing for a heavy week of policy decisions.
- The Fed Transition: The Federal Reserve is expected to hold rates steady this Wednesday. This meeting is particularly significant as it likely marks Jerome Powell’s final session as Chair, with Kevin Warsh anticipated to succeed him in May.
- Global Policy: Decisions from the ECB, Bank of England, and Bank of Japan are also due this week.
With inflation risks rising alongside oil prices, there is growing concern that central banks may be forced to keep interest rates higher for longer to combat the economic fallout of the Middle East crisis.
Market Sentiment: Fragile and uncertain. The “nerve-wracking” tension in the Middle East continues to act as the primary driver for both commodities and currency volatility.
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