Gold Price Today: The domestic bullion market reopened with a sharp jolt as evening trade began on the Multi-Commodity Exchange after the Holi holiday break. With the morning session shut on account of the festival, traders returned to screens only to find global cues firmly negative. MCX gold futures for April delivery opened nearly 3% lower at ₹1,61,092 per 10 grams compared to the previous close of ₹1,66,074, reflecting the weakness seen on the Comex overnight. Silver fared even worse, plunging 6% to ₹2,61,773 per kilogram.
The sell-off tracked a steep correction in international markets where spot gold slipped below the $5,200 mark after falling 3%, while silver crashed as much as 11% at one point, briefly dipping below $80 an ounce, underscoring the severity of the global rout.
WHAT BROUGHT THIS ABRUPT DROP?
Dollar Strength Overpowers Safe-Haven Demand
The primary trigger behind the fall in gold and silver prices was a sharp rebound in the US dollar, which climbed to a one-month high and dampened demand for dollar-denominated commodities. The stronger greenback made precious metals more expensive for holders of other currencies, thereby limiting fresh buying interest.
This currency surge effectively offset safe-haven inflows that had earlier supported bullion amid escalating US-Israeli military action against Iran. While geopolitical tensions initially lifted gold, the dollar’s rally and profit booking ultimately dominated sentiment, resulting in a synchronized decline across domestic and international markets.
Federal Reserve Policy Expectations Shift
Another crucial factor influencing bullion prices was the evolving outlook on US monetary policy. Markets increasingly expect the US Federal Reserve to hold interest rates steady at the conclusion of its upcoming two-day meeting ending March 18.
Although gold, being a non-yielding asset, typically benefits in a low-interest-rate environment, the immediate reaction in financial markets favored the strengthening dollar. On Comex, silver fell 9% to $81.66 an ounce after hitting a more than four-week high a day earlier, while gold declined 2.6% to $5,172 an ounce, reflecting the pressure from currency movements and shifting rate expectations.
Escalating Geopolitical Tensions and Energy Risks
The broader geopolitical backdrop remains tense and volatile. US President Donald Trump reiterated that the United States would continue its military offensive for as long as necessary, while Israel announced a fresh wave of strikes targeting Iran’s command centres. Tehran retaliated by attacking oil and gas infrastructure and threatening shipping in the strategic Strait of Hormuz.
Rising energy prices have intensified inflation concerns, which could eventually influence the Federal Reserve’s policy decisions. For now, however, the dominant narrative in bullion markets remains dollar strength overshadowing safe-haven demand, leading to a sharp correction in gold and a steeper collapse in silver.
Gold Price Today: FAQs
1. Why did gold prices fall on MCX after Holi?
Gold futures on MCX dropped 3% to ₹1,61,092 per 10 grams as trading resumed after the Holi holiday, tracking weakness in global markets where spot gold fell nearly 3% amid a strong US dollar.
2. How much did silver prices decline?
Silver saw a sharper fall, plunging 6% on MCX to ₹2,61,773 per kg, while Comex silver crashed up to 9% to $81.66 an ounce after hitting a four-week high a day earlier.
3. What role did the US dollar play in the fall?
The US dollar climbed to a one-month high, making dollar-denominated commodities like gold and silver more expensive for foreign buyers, which reduced fresh demand and pressured prices.
4. How are Federal Reserve expectations impacting bullion?
Markets now expect the US Federal Reserve to hold interest rates steady at its March 18 meeting, with the probability of a rate hold in June rising above 60%. The stronger dollar reaction outweighed gold’s usual benefit from stable or lower rates.
5. Did geopolitical tensions fail to support gold?
Although escalating US-Israel-Iran tensions initially boosted safe-haven demand, the dollar’s strength and profit booking overshadowed geopolitical risks, leading to a sharp correction in precious metals.
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