Gold, Silver Fall for Third Straight Session as Dollar and Oil Prices Rise

Gold and silver prices in Delhi experienced a decline for the third consecutive session, driven by a stronger U.S. dollar, rising bond yields, and elevated crude oil prices. As of October 23, gold prices fell by ₹1,900, bringing the cost to ₹1,46,100 per 10 grams, while silver saw a sharper drop of ₹5,500 to reach ₹2,02,000 per kg.

According to the All India Sarafa Association, the price of 99.9% pure gold decreased from ₹1,48,000 per 10 grams in the previous session. Silver prices have seen a significant reduction as well, dropping from ₹2,07,500 per kg just a day earlier. Since September 30, the price of silver has plummeted by ₹30,000, which is approximately a 13% decline, indicating a broader downturn in commodity markets.

Saumil Gandhi, a senior commodities analyst at HDFC Securities, noted that domestic gold prices have reached their lowest levels since early July, influenced by weak global market trends. Pinky Yadav, a commodity fundamental analyst at Choice Broking, pointed out that silver has fallen around 14% over the past month, correlating with a general selloff in the equity markets. She remarked that some investors are liquidating their holdings in precious metals to offset losses in technology stocks, further exerting downward pressure on bullion prices.

The appeal of gold and silver as investment options has also been diminished by a stronger U.S. dollar and rising Treasury yields, which have made interest-bearing assets more attractive. Additionally, ongoing inflation concerns, exacerbated by geopolitical tensions in West Asia, have contributed to the rise in crude oil prices, with Brent crude nearing $115 per barrel. This situation has led to expectations that interest rates may remain high for an extended period.

Higher interest rates typically have a negative impact on gold prices, as investors tend to prefer assets that yield returns, such as bonds. In international markets, spot gold briefly dipped below $4,000 per ounce before recovering slightly to trade at approximately $4,024.37 per ounce. Meanwhile, spot silver decreased by 1.41%, settling at $53.83 per ounce.

Praveen Singh, the head of commodities at Mirae Asset Sharekhan, reported that spot gold reached a new cycle low of $3,986 per ounce during overseas trading. The dollar index and U.S. Treasury yields have shown slight increases, while the persistent high prices of Brent crude continue to shape inflation expectations and influence investor behavior.

Looking ahead, the short-term trajectory of precious metals is expected to remain sensitive to fluctuations in the dollar, bond yields, oil prices, and geopolitical developments. Investors will be closely monitoring these factors as they navigate the current market landscape.