India gold prices tumble; silver slumps nearly 4%: Key factors behind the fall

Gold and silver prices witnessed a sharp decline in futures trade on Tuesday (June 23) as a stronger US dollar, rising Treasury yields, and growing expectations of further interest rate hikes by the US Federal Reserve weighed heavily on bullion sentiment.

On the Multi Commodity Exchange (MCX), silver contracts for July delivery plunged ₹8,158, or 3.48%, to ₹2.26 lakh per kilogram in a business turnover of 10,059 lots.

Gold prices also remained under pressure. Gold contracts for August delivery dropped ₹1,446, or 0.98%, to ₹1.46 lakh per 10 grams in a turnover of 1,730 lots.

Analysts said bullion markets came under pressure as investors reassessed the outlook for US monetary policy amid expectations that the Federal Reserve could resume tightening as early as September.

Navneet Damani, Head of Research – Commodities at Motilal Oswal Financial Services, said a stronger dollar and elevated bond yields dampened investor appetite for precious metals.

“The dollar index is hovering near a one-year high following increased expectations of a Fed rate hike and elevated Treasury yields, which has negatively impacted bullion sentiment,” he said.

The weakness in domestic markets mirrored sharp losses in overseas trade. In international markets,Comex silver futures for July delivery

fell $3.57, or 5.45%, to $62.01 per ounce in New York, while gold futures declined 1.51% to $4,126.77 per ounce.

According to Gaurav Garg, Research Analyst at Lemonn Markets Desk, silver saw steeper losses globally amid easing geopolitical concerns and expectations of improved crude oil supplies.

“Uncertainty surrounding US-Iran peace talks and improving oil supply conditions reduced safe-haven demand for precious metals,” Garg said.

Market participants are also closely tracking developments in the global energy market after the US granted Iran a 60-day licence to sell oil, boosting expectations of a recovery in global crude supplies. Improved traffic through the Strait of Hormuz and alternative export arrangements by Gulf producers have further eased supply concerns.

Meanwhile, investors await the upcoming Personal Consumption Expenditures (PCE) report from the United States, widely considered the Federal Reserve’s preferred inflation gauge.

Renisha Chainani, Head of Research at Augmont, said the inflation data could provide fresh direction to bullion markets.

“Traders will closely watch the PCE report for clues on underlying inflationary pressures and the Fed’s future interest rate trajectory,” she noted.

Commenting on the outlook for gold and jewellery exports during the second half of calendar year 2026, Colin Shah, Managing Director of Kama Jewelry, said gold could gradually regain momentum if geopolitical conditions stabilise.

“Traditionally, gold prices witness stronger demand during the August to October festive season. However, much will depend on how global economic and geopolitical developments unfold,” Shah said.

He added that India’s jewellery exports are expected to remain cautiously optimistic despite pressure from elevated gold prices, with demand for lightweight studded jewellery likely to rise amid cautious consumer spending trends.

Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions and President of the India Bullion and Jewellers Association (IBJA), said rising Fed rate hike expectations have intensified pressure on bullion prices.

“The CME FedWatch tool now indicates an 89% probability of a December Fed rate hike, compared to 61% before the recent FOMC meeting,” Kothari said.

He added that key support levels for gold are seen in the $4,050–4,100 an ounce range, while silver could test the $60–61 per ounce zone in the near term.