Precious Metal Update: Gold slumps by Rs 3,300/10 gm, silver cheaper by Rs 11,800/kg—Key things to know

Why are gold and silver rates falling? Domestic gold and silver futures came down sharply on Tuesday, mirroring a slide in global benchmarks which continued to retreat from a three-week high registered this week. Strength in the US dollar (USD) overseas -- making precious metals less attractive for those holding other currencies -- and anticipated profit-taking by investors dented the rates, though uncertainty on the US tariff front and falling equities lent support at lower levels, say analysts.

On MCX, near-month (April 2 expiry) gold futures fell by as much as Rs 3,313 -- or 2.1 per cent -- to Rs 1,58,285 before recovering some of those losses.

As the market entered the final hour of trade, the gold contract was down by Rs 1,905 -- or 1.2 per cent -- for the day, trading at Rs 1,59,693.

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The next-month (June 5) contract quoted at Rs 1,63,599, marking a loss of Rs 1,237 -- or 0.8 per cent -- from its previous close, having gyrated in a range of Rs 1,62,101-1,64,577 during the session so far.

Near-month (March 5) silver futures fell by as much as Rs 11,834 -- or 4.5 per cent -- to Rs 2,53,499, last seen trading weaker by Rs 5,724 -- or 2.2 per cent -- at Rs 2,59,609.

Key factors impacting precious metals and crucial signals to track

The dollar index -- which gauges strength in the greenback against six other currencies -- inched up 0.1 per cent to 97.81, having risen to as high as 97.99 earlier on Tuesday.

Analysts awaited clarity on the following for cues:

• US tariff plans
• Washington-Tehran talks
• AI-fuelled sell-off in tech stocks

Typically, losses in equities boost the inflation-beating appeal of precious metals like gold, and vice versa.

On Monday, Wall Street suffered a $1.1-trillion mcap loss that analysts broadly attributed to AI-related apprehensions.

Gold off three-week highs

This week, the yellow metal hit a three-week high in the global market, after US President Donald Trump vowed to raise duties to 15 per cent following the US Supreme Court ruling that his use of an emergency law to impose tariffs exceeded his authority.

Trump's tariffs have kept investors on tenterhooks for almost a year now, with ripples visible across asset classes including precious metals. Trade uncertainty often supports gold. However, the immediate market reaction saw a rotation out of safe-haven assets as investors reassessed risk appetite.

Analysts globally are assessing the impact of the new US tariff on exports into the US, causing volatility in safe-haven assets.

Meanwhile, officials from Iran and the US are scheduled to engage in the next round of nuclear talks in Geneva on Thursday. The upcoming meeting comes amid growing concerns about the risk of military conflict between the longtime adversaries.