Deep losses in precious metals extended into Wednesday’s trade, as surging crude oil prices intensified inflation concerns and reinforced expectations that central banks may keep interest rates higher for longer.
COMEX gold futures dropped $86 per troy ounce to an intraday low of $4,522 on 29 April, marking their lowest level in a month. Silver futures fell $1.5 to $71.71, the lowest level since 7 April. Over the last seven trading sessions, the white metal has declined 14% from its recent high of $83.24.
In Tuesday’s trade, both gold and silver had slipped 2%. The latest selloff has dragged gold’s month-to-date decline to 4%, while silver has fallen 4.16% so far in April. Both metals are now on track to post a second consecutive monthly loss.
Rising energy prices have weakened safe-haven demand, as elevated crude prices could reignite inflationary pressures, prompting central banks to maintain a tighter interest-rate stance. While bullion is traditionally viewed as an inflation hedge, higher interest rates reduce its appeal as a non-yielding asset.
Brent crude, the international benchmark, gained another $4.34 to hit $115.60 a barrel, extending its winning streak to eight straight sessions.
Earlier this month, precious metals attracted buyers after US President Donald Trump announced a ceasefire, which was later extended, raising hopes that the ongoing conflict could move toward resolution. However, tensions have continued to simmer since then, as both Iran and the US have failed to agree on key terms.
The diplomatic deadlock has also reportedly prompted Trump to consider extending the blockade of Iranian ports. The Wall Street Journal reported, citing US officials, that Trump has instructed aides to prepare for a prolonged naval blockade in a bid to further squeeze Iran’s economy and oil exports.
The report added that the US president assessed other options, including renewed bombing, could send energy prices to multi-year peaks.
Trump on Wednesday also issued a fresh warning to Iran in a Truth Social post, saying the country should “better get smart soon” and accusing Tehran’s leadership of failing to “get their act together.”
Despite the escalating tensions, equities across key global markets remained relatively resilient, while precious metals continued to weaken.
Investors are now awaiting the US Federal Reserve’s policy decision later in the day. While the central bank is widely expected to keep interest rates unchanged, commentary from policymakers on the future rate path will be closely watched, as it could influence the next move in gold and silver prices. Earlier this week, the BOJ left its policy rate unchanged.
MCX gold plunges over ₹2,000; silver at ₹2.36 lakh
Tracking weakness in the international market, the near-month gold futures contract on MCX fell ₹2,077, slipping below the ₹1.48 lakh mark for the first time since 2 April to hit ₹1,47,950 per 10 grams, thereby extending its losing streak to a third straight session.
The silver futures contract on MCX dropped modestly by ₹493 per kilogram to the day’s low of ₹2,36,852. In the previous session, the metal had touched its lowest level since 7 April. Silver has witnessed sharp volatility throughout April, swinging between ₹2.61 lakh and ₹2.24 lakh.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
