Gold and silver futures witnessed sharp declines on Friday as investors dumped precious metals amid uncertainty over the implementation of the US-Iran peace agreement, a stronger US dollar and a broader selloff in global markets.
On the Multi Commodity Exchange (MCX), gold contracts for August delivery fell Rs 3,392, or 2.27 per cent, to Rs 1,45,917 per 10 grams in a business turnover of 9,099 lots, extending losses for a second consecutive session.
Silver contracts for July delivery slumped Rs 8,766, or 4 per cent, to Rs 2,28,806 per kilogram in a business turnover of 11,080 lots. The white metal had already plunged Rs 14,235, or 5.7 per cent, in the previous session.
Analysts attributed the sharp fall to fading optimism surrounding the US-Iran peace process after high-level talks scheduled in Switzerland were postponed, raising doubts over the implementation of measures aimed at ending hostilities and restoring oil flows through the Strait of Hormuz.
Switzerland’s foreign ministry said the talks planned for Friday had been postponed, while US Vice President JD Vance delayed his visit and Iran’s participation in the discussions remained uncertain.
Gold prices also came under pressure from a stronger US dollar and the US Federal Reserve’s latest policy stance. The Fed kept interest rates unchanged this week and signalled limited urgency to ease monetary policy, supporting the dollar and Treasury yields.
“Gold prices faced downward pressure on Friday amid a stronger US dollar,” said Gaurav Garg, Research Analyst at Lemonn Markets Desk.
Meanwhile, analysts noted that geopolitical uncertainty persisted after Israel launched fresh strikes in Lebanon despite the broader framework of the US-Iran agreement.
In the international market, Comex gold futures for August delivery fell USD 95, or 2.24 per cent, to USD 4,150.90 per ounce in New York. Comex silver futures for July delivery declined USD 2.85, or 4.3 per cent, to USD 63.46 per ounce.
“MCX silver has continued its downward momentum for the fourth consecutive week, declining nearly 4 per cent on Friday,” said Kaveri More, Commodity Analyst at Choice Broking.
Renisha Chainani, Head of Research at Augmont, said the selloff in silver was further amplified by a stronger rupee, which touched a six-week high against the US dollar amid improving capital inflows and stronger investor sentiment.
Analysts said bullion prices are likely to remain volatile as investors continue to assess developments in West Asia, the progress of the US-Iran peace process, and the outlook for global interest rates and economic growth.