Gold and silver prices declined sharply in early trade on Monday. On the Multi Commodity Exchange (MCX), gold August futures slipped 1.16% to ₹1,41,820 per 10 grams, while silver September futures fell 2.34% to ₹2,17,448 per kg.
Prices declined as weak global trends and concerns over inflation and interest rates kept investors cautious. While global uncertainty continued to support safe-haven demand, a stronger US dollar and rising bond yields weighed on precious metal prices.
A higher-than-expected inflation reading could delay interest rate cuts, strengthening the US dollar and putting further pressure on gold prices. On the other hand, softer inflation data may revive hopes of monetary easing and support a recovery in bullion.
Investors are also keeping a close watch on developments in the Middle East. Rising geopolitical tensions have increased uncertainty in global financial markets, prompting investors to seek the safety of gold. However, analysts believe concerns over inflation and interest rates are currently outweighing the safe-haven appeal of the yellow metal.
Silver, which is influenced by both investment demand and industrial consumption, witnessed a steeper decline than gold. Market experts said the white metal remains more volatile due to uncertainty surrounding global economic growth and industrial demand.