A significant decline in the prices of gold and silver has been observed in the domestic commodity market. On MCX, the price of silver futures for December 4 fell to 8000 rupees, reaching the mark of 2.11 lakh rupees per kilogram. Simultaneously, there was a substantial drop in gold prices as well.
Current prices show that on MCX, 10 grams of gold decreased by 1.50%, amounting to 1,46,366 rupees, while silver dropped by approximately 3.50%, reaching 2,11,503 rupees per kilogram. This decrease is attributed to a sudden fall in the international market.
In the global market, gold fell by 1.31%, reaching $4,122.05 per ounce, and silver lost 4.18%, reaching $57.035 per ounce.
The reason for this movement was the release of US inflation data on Wednesday, which recorded an increase in CPI. In September, the US inflation indicator increased by 0.6% compared to the previous month. Since inflation was higher than expected, concerns arose in the market that the US Federal Reserve might raise interest rates, which triggered a sharp sell-off of gold and silver.
Furthermore, the strengthening dollar puts pressure on demand, as gold and silver are traded in dollars internationally, making them more expensive for buyers in other countries. High or rising interest rates in the US make interest-bearing bonds more attractive to investors, leading to a decrease in the prices of gold and silver, which are considered safe-haven assets.
