Gold, Silver Prices Fall Sharply This Week As Rising Crude Oil Fuels Inflation Fears

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Gold and silver prices declined sharply this week as rising crude oil prices intensified inflation concerns and strengthened expectations of higher global interest rates for longer.

On Friday, December gold futures on the Multi Commodity Exchange (MCX) fell 0.81 per cent to Rs 1,42,150. December silver futures declined 1.75 per cent to Rs 1,96,100 per kg.

Gold recorded its steepest weekly decline since June and fell below the psychologically significant $4,000-per-ounce mark for the first time since mid-July, analysts said.

Silver faced additional pressure from weakness in US technology stocks, particularly artificial intelligence-linked companies. The selloff triggered margin calls and forced investors to liquidate their precious-metal holdings.

Crude oil prices climbed to multi-month highs following renewed attacks on Saudi energy infrastructure and shipping routes. Meanwhile, the Indian rupee surrendered its early-week gains as higher oil prices and renewed dollar demand weighed on the currency.

Lower gold prices encouraged physical purchases in India during the Dussehra festival. However, demand for jewellery in China remained subdued.

Market participants expect precious metals to remain under pressure if elevated energy prices sustain inflation concerns and expectations of tighter monetary policy. Physical demand and easing bond yields could provide support after the recent correction.

Markets largely expect the US Federal Reserve to keep interest rates unchanged at its October 27-28 policy meeting. However, traders continue to anticipate a possible December rate hike, assigning it an approximately 78 per cent probability.

Investors await next week’s US Personal Consumption Expenditures report for fresh signals on inflation and interest-rate decisions.

Analysts placed immediate resistance for Comex gold at $4,070-$4,100 per ounce, with support at $3,970-$4,000. For MCX gold, resistance stands at Rs 1,43,000-Rs 1,43,700, while support lies at Rs 1,40,000-Rs 1,41,000.

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Pragati Upadhyay

I report stories and occasionally rescue facts from chaos. By profession, I’m a journalist; by conviction, a social worker who believes words should move people, not just headlines. I question power, celebrate ordinary heroes, and sometimes irritate the comfortable. If truth had a shift, I’d probably be working overtime.