Gold and Silver Rates: Yellow metal sinks below Rs 1.43 lakh, silver below Rs 2.19 lakh; key reasons

Gold and Silver Crash: Yellow and white metal rates sharply tumbled on Thursday as the ongoing West Asia conflict signalled no sign of abating, keeping crude oil at elevated levels and fanning fears that sticky inflation will prevent interest rates to ease for now. Although rising geopolitical tensions generally support precious metal rates, but analysts say that higher levels of benchmark oil rates and their potential impact on monetary policies is denting their appeal because they are non-yielding assets.

What are non-yielding assets?

Non-yielding assets -- like gold and silver -- are assets that do not pay interest, dividends or any other periodic returns or investor rewards. These assets simply carry their inherent value, unlike bonds that pay guaranteed and fixed coupon payments.

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Gold and Silver Prices | MCX vs global benchmarks vs currency—Here's a quick take

At 6:50 pm in India:

• MCX gold futures (April 2): down 6.7 per cent (Rs 10,225) at Rs 1,42,800
• MCX gold futures (June 5): down 7.2 per cent (Rs 11,329) at Rs 1,46,108
• MCX silver futures (May 5): down 11.8 per cent (Rs 29,301) at Rs 2,18,893
• International gold benchmark: down 6.7 per cent at $4,570.6 per ounce
• International silver benchmark: down 10 per cent at $69.8 per ounce
• US gold: down 5.0 per cent at $4,578.5 per ounce
• Dollar Index: down 0.2 per cent at 99.9
• Rupee vs dollar: On Wednesday, the INR closed at 92.63 against the USD; the market remained shut on Thursday for Gudi Padwa

The three MCX contracts were not far from their intraday lows:

• MCX gold (April 2): down by Rs 11,904 or 7.8 per cent at Rs 1,41,121 vs its previous close of Rs 1,53,025
• MCX gold (June 5): down by Rs 12,937 or 8.2 per cent at Rs 1,44,500 vs its previous close of Rs 1,57,437
• MCX silver (May 5): down by Rs 33,982 or 13.7 per cent at Rs 2,14,212 vs its previous close of Rs 2,48,194

Strength in the dollar, which some analysts attributed to profit-booking following a phenomenal start to the year, along with investor rotation into energy assets put pressure on the rates.

Major central banks moving with a hawkish tilt -- with both the American and British central banks having kept rates on pause in the past 24 hours -- is validating fears of inflation risks from rising energy prices due to the raging Middle East conflict, which began with joint US-Israel strikes against Tehran, and triggering Iran's retaliatory action against several countries in the region and the blockage of the Strait of Hormuz.

What's influencing gold and silver rates now?

Key factors at play in gold and silver markets

• Analysts attribute the current slide to multiple factors, including:
• Rising energy prices due to Middle East conflict: These are multiplying inflation fears.
• Growing inflation concerns: These worries are denting the metals' safety-net appeal; typically, non-yielding assets are chased for their inflation-beating appeal
• Gold overcrowded institutional trade: Many analysts see this as an increasing downside risk to gold rates
• Profit-booking: Gold and silver have had a phenomenal run in 2025
• Capital rotation: Investors are anticipated to be moving funds to other assets like hydrocarbons
• Dollar strength: This makes gold more expensive for investors holding other currencies
• Shifting market focus: The surge in crude oil prices -- above $110/barrel -- could be shifting market focus

What analyst says

According to Manoj Kumar Jain of Prithvi Finmart, the trend in both precious metals continues to be weak, with gold and silver seeing heavy sell-off amid a hawkish Fed and a stronger dollar.

The Fed Chairman said that the impact of Iran war on the economy, growth and inflation is uncertain and can’t predict the actual impact in present situation, and higher energy prices will certainly increase inflation and lowered disposable income and it may impact economy for longer term, explained Jain.

"The possibility for any rate cut this year is faded and the dollar is showing strength and could continue to pressurise precious metal prices. We are experiencing very high price volatility in both precious metals," said the analyst before the latest fall.

He expects gold and silver prices to remain volatile this week mirroring the trend in the dollar index, higher crude oil prices and uncertainties related to the US-Iran war.