Gold and Silver Rates: Yellow metal sinks below Rs 1.40 lakh, silver under Rs 2.25 lakh; Motilal Oswal explains key reasons

Gold and silver prices have declined sharply in recent days, even as geopolitical tensions remain elevated. The fall comes despite traditional safe-haven demand, as rising inflation fears and interest rate concerns weigh heavily on bullion.

As of 5:30 pm, MCX gold stood at Rs 1,39,490 per 10 gm, while MCX silver was at Rs 2,24,761 per kg.

What triggered the fall in gold, silver prices?

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Gold saw one of its sharpest weekly declines in recent years. The key reason is a shift in market focus - from geopolitical risk to inflation and monetary policy.

The ongoing US-Israel-Iran conflict, which has now stretched into its fourth week, pushed crude oil prices above $100 per barrel. Normally, such tensions support gold. But this time, rising oil prices have increased global inflation concerns.

Higher inflation reduces the appeal of gold and silver because they do not offer interest income.

Why inflation is hurting bullion

The biggest pressure on bullion is coming from the ‘higher-for-longer’ interest rate outlook.

• Rising oil prices - higher inflation
• Higher inflation - delayed rate cuts or possible hikes
• Higher rates - stronger bond yields and dollar

This chain reaction has made gold less attractive compared to yield-bearing assets like bonds.

What central banks are signalling?

The US Federal Reserve kept rates unchanged at 3.50–3.75 per cent, but signalled caution.

Fed Chair Jerome Powell indicated that inflation risks - especially from energy prices - could delay rate cuts. Markets are now even pricing in the possibility of further tightening.

Globally, the trend is similar:

• Reserve Bank of Australia surprised with a rate hike
• Bank of England may hike again later this year
• European Central Bank and others remain cautious

This coordinated stance has strengthened the “tight policy” narrative, dragging gold and silver lower.

Strong dollar, weak ETF flows add pressure

Another major factor is the rising US dollar.

• A stronger dollar makes gold expensive for global buyers
• US Treasury yields have risen, attracting investors away from bullion

Gold ETFs saw strong inflows earlier in 2026, but that trend has slowed. At the same time, speculative positions have weakened, signalling reduced bullish sentiment.

Why safe-haven demand is not working this time?

Traditionally, geopolitical tensions boost gold. But this time, the inflation impact of the crisis is stronger than the fear factor.

In simple terms:

• War is pushing oil prices up
• Oil is pushing inflation up
• Inflation is keeping interest rates high
• High rates are pulling gold down

Outlook: What next for gold, silver?

According to Motilal Oswal, the overall bias remains sideways to weak in the near term.

Gold outlook

• Resistance: Rs 1,41,125 – Rs 1,44,500
• Downside target: Rs 1,30,700
• Selling likely on rise towards Rs 1,38,000

Silver outlook

• Resistance: Rs 2,27,000 – Rs 2,31,500
• Downside target: Rs 1,72,000 – Rs 1,75,000
• Selling pressure likely near Rs 2,18,000

Gold and silver are falling not because demand has vanished, but because macro factors - inflation, interest rates, and dollar strength are dominating the market.

Until inflation cools and central banks signal rate cuts, bullion is likely to remain under pressure despite global uncertainty.