Gold and silver prices recorded sharp weekly declines as rising crude oil prices intensified inflation concerns and strengthened expectations that global interest rates could remain elevated for longer.
Gold prices fell 3.28 per cent over the week, while silver declined 7.83 per cent, reflecting a broad sell-off in precious metals amid shifting expectations about monetary policy and global economic conditions.
MCX Gold and Silver Extend Losses
On Friday, gold futures on the Multi Commodity Exchange (MCX), expiring in December, fell 0.81 per cent to Rs 1,42,150. December silver futures declined 1.75 per cent to Rs 1,96,100 per kilogram.
Gold recorded its steepest weekly decline since June and slipped below the psychologically significant $4,000-per-ounce mark for the first time since mid-July, according to market analysts.
The decline reflected growing concerns that persistent inflation could delay interest-rate cuts or keep borrowing costs elevated, reducing the appeal of non-yielding assets such as gold and silver.
Crude Oil Rally Triggers Selling Pressure
Crude oil prices surged to multi-month highs following renewed attacks on Saudi energy infrastructure and shipping routes. Higher energy costs have raised concerns about inflation across major economies.
The Indian rupee also surrendered its early-week gains amid rising oil prices and renewed demand for the US dollar, adding to the pressure on domestic financial markets.
Meanwhile, weakness in US technology stocks, particularly companies linked to artificial intelligence, intensified the decline in silver. The market downturn reportedly triggered margin calls, forcing some investors to liquidate their precious-metal holdings to meet financial obligations.
Indian Gold Demand Offers Some Support
Despite the broader sell-off, lower prices encouraged physical gold purchases in India during the Dussehra festival, providing some support to the domestic market.
However, demand for jewellery in China remained subdued, limiting the recovery in global precious-metals prices.
Market participants believe gold and silver could remain under pressure if elevated energy prices continue to fuel inflation concerns and expectations of tighter monetary policy. At the same time, stronger physical demand and a moderation in bond yields could help prices recover following the recent correction.
US Federal Reserve Policy in Focus
Investors are closely monitoring the US Federal Reserve’s October 27–28 policy meeting. Markets largely expect the Fed to leave interest rates unchanged, although expectations of another rate hike in December remain elevated.
According to the supplied market assessment, traders were pricing in an approximately 78 per cent probability of a December rate hike.
Investors are also awaiting the upcoming US Personal Consumption Expenditures (PCE) inflation report, a key indicator that could influence expectations for future interest-rate decisions.
Any indication that inflation remains persistent could put further pressure on precious metals, while softer inflation data or falling bond yields could support prices.
Gold Price Support and Resistance Levels
Market analysts have identified the following key technical levels for gold:
COMEX Gold
- Resistance: $4,070–$4,100 per ounce
- Support: $3,970–$4,000 per ounce
MCX Gold
- Resistance: Rs 1,43,000–Rs 1,43,700
- Support: Rs 1,40,000–Rs 1,41,000
Traders will closely watch these levels in the coming sessions to assess whether gold prices can stabilize or face further declines.
With crude oil prices, inflation data and Federal Reserve policy expectations driving market sentiment, gold and silver prices are likely to remain sensitive to global economic developments in the near term.
