Gold and silver prices declined on Monday, September 28, as a sharp rise in crude oil prices and a stronger US dollar put pressure on precious metals. Investors also remained cautious about the impact of higher energy costs on inflation and interest rates.
The gold price today fell in both international and domestic markets after gold had recently touched record levels. Spot gold dropped more than 2% in early trading, moving towards $4,200 an ounce. The decline marked one of the sharpest falls in gold prices in recent weeks.
In India, 24-carat gold was trading around ₹1.51 lakh per 10 grams, while 22-carat gold was around ₹1.39 lakh per 10 grams. Silver was quoted at nearly ₹2.35 lakh per kg, although retail rates can vary between cities, jewellers and market timings.
The fall comes after a strong run in the precious metals market, with investors having turned to gold amid geopolitical tensions, expectations of lower interest rates and concerns over the global economy.
Why gold prices are falling
The immediate pressure on bullion came from the sharp rise in crude oil prices. Brent crude moved above $106 a barrel as tensions surrounding the US-Iran situation raised concerns over global oil supplies.
Higher crude prices can push inflation higher, particularly in major economies. This has led investors to reassess expectations about the pace of interest-rate cuts by the US Federal Reserve.
Gold does not generate interest income. As a result, higher interest rates can make interest-bearing assets relatively more attractive and reduce demand for the yellow metal.
The US dollar was another factor weighing on gold. A stronger dollar generally makes gold more expensive for buyers using other currencies and can put additional pressure on international demand.
Gold rates across Indian cities
Domestic gold prices remained high despite Monday’s correction. Rates varied across major markets, with Delhi, Mumbai, Kolkata and Chennai recording slightly different prices.
The difference between the quoted bullion price and the amount paid by jewellery buyers is also important. Retail customers typically pay additional costs such as GST, making charges and other jewellery-related expenses.
Therefore, the final price of a gold ornament can be significantly higher than the headline market rate for 24K or 22K gold.
MCX gold under pressure
The domestic futures market also reflected the cautious mood. MCX gold had closed lower in the previous session, while silver futures had managed to gain.
Gold futures remained sensitive to movements in international bullion prices, the rupee and global interest-rate expectations. Any significant change in the dollar or crude oil could therefore influence domestic prices in the near term.
Investors are also watching whether the recent correction attracts fresh buying after gold’s strong rally.
Silver remains volatile
Silver prices also declined on Monday, although the metal has shown greater volatility than gold in recent sessions.
Silver is influenced by both investment demand and industrial consumption. Its industrial use in sectors such as electronics, solar energy and other manufacturing activities means that expectations for global economic growth can also affect prices.
The sharp movements in silver this month have made it one of the most closely watched commodities alongside gold.
What investors will watch next
The direction of gold and silver prices will depend on several global factors in the coming days. Crude oil prices, the US dollar, Federal Reserve policy expectations and geopolitical developments will remain key drivers.
US economic data will also be important because it could influence expectations around the timing and pace of future interest-rate cuts.
In India, movements in the rupee will add another layer to domestic bullion prices. A weaker rupee can make imported gold more expensive even when international prices remain unchanged.
Gold’s recent rally has highlighted its role as a safe-haven asset during periods of uncertainty. Monday’s correction, however, shows that prices can move sharply when expectations around inflation, interest rates and the dollar change.
With crude oil trading at elevated levels and global markets remaining volatile, gold rate today, silver rate today, MCX gold and MCX silver will continue to remain in focus for investors and retail buyers.