A sharp slide in precious metals prices. Spot silver prices have plunged 6%, near $66/troy ounce level while gold is down nearly 3% close to near the $4,242/oz mark in international markets following hawkish commentary by the US Federal Reserve and a firm dollar index. The dollar index climbed back to the 100 levels, weighing negatively on the precious metals.
MCX Gold and Silver slide on international cues
The same trend was mirrored in the domestic markets too, as the most-active contract for gold on MCX was down 2.5% quoted at Rs 1,50,005 per 10 gram mark, while MCX Silver futures for July fell 5% trading at Rs 2,39,114 per kg.
“Gold prices witnessed sharp weakness following the Federal Reserve policy announcement, as comments from new Fed Chair Kevin Warsh suggested the possibility of one interest rate hike in 2026, if the US economy continues to remain resilient,” Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities, said.
Fed holds rates in Warsh’s debut, but hawkish dot plot signals no cuts in 2026
Markets expect at least one rate hike
While Washington and Tehran have signed an official Memorandum of Understanding (MoU), markets continue to price in the possibility of at least one rate hike by the Fed this year. According to the CME Fedwatch tool, traders expect the central bank to raise key interest rates in its December meeting.
Oil prices have slumped significantly from their record high levels, with analysts suggesting that crude may even test its pre-war levels. However, markets remain cautious as US President Donald Trump has threatened to resume attacks on Iran if the latter doesn’t abide by its commitments.
The Fed’s latest forecasts indicated that policymakers are becoming increasingly concerned about inflation. “The hawkish Fed leaves spot gold with a greater bias of dipping back into sub-$4,000 waters rather than reclaiming the $5,000 handle in the second-half of 2026,” Reuters quoted Han Tan, chief market analyst at Bybit.
Gold susceptible to greater price action
Trivedi noted that the yellow metal was highly volatile throughout the session, swinging between the range of $4330 to $4250 as traders reacted to the Fed’s outlook.
“Going forward, gold is likely to remain sensitive to interest rate expectations, dollar movements, and developments surrounding the ongoing US-Iran negotiations,” he added.
Precious metals analyst quoted by Reuters stated that, “With the Fed also reviewing its communications settings, gold could be susceptible to greater price reactions to US economic data releases moving forward.”
Reuters also highlighted that Commercial bank ANZ in a note highlighted that, “Investment demand (for gold) is weak, with exchange-traded funds outflows and lighter positioning, but physical demand, especially from China, and central bank buying are underpinning the market.”
Gold- silver prices in 2026 so far
The first half of 2026 has been heavily volatile for the precious metals spaces as both gold and silver surged to their all-time peaks and also slumped to the to 6-month lows thereafter. The yellow metal recently touched its all time low of $4,046 falling 27% from its January peak of $5,600.
While, silver being the more restless metal touched its 2026 low of $63 just last week, falling nearly 48% from its this year’s high of $121.
