Gold, Silver Slip as Strong Dollar Hits Bullion Demand
Rising crude prices and firm US inflation data weigh on expectations of early interest rate cuts
- Gold and silver prices decline as US dollar strengthens in global markets
- Rising crude oil prices revive concerns about persistent inflation
- US CPI rises 0.3% in February, matching market expectations
- Domestic gold futures close near ₹1.62 lakh per 10 grams on MCX
GG News Bureau
Mumbai, 12th March: Gold and silver prices traded lower on Thursday as a stronger US dollar weighed on bullion demand, while rising crude oil prices revived inflation concerns and dampened expectations of near-term interest rate cuts by the US Federal Reserve.
In the international market, spot gold slipped 0.2 percent to $5,165.73 per ounce, while US gold futures for April delivery declined 0.2 percent to $5,171.40 per ounce. Spot silver remained largely stable at $85.82 per ounce.
Market sentiment was influenced by the strengthening of the US dollar index, which gained about 0.2 percent. A stronger dollar makes commodities priced in the US currency, such as gold, more expensive for buyers using other currencies, thereby reducing demand.
At the same time, crude oil prices moved higher globally, increasing concerns about persistent inflation. Investors are closely monitoring US economic data for signals about the Federal Reserve’s future monetary policy.
Recent data showed that the US Consumer Price Index (CPI) rose 0.3 percent in February, slightly higher than January’s 0.2 percent increase but in line with market expectations. On an annual basis, inflation stood at 2.4 percent, also matching forecasts.
Firm inflation readings and rising energy prices have led markets to reassess the likelihood of early interest rate cuts. Higher interest rates tend to reduce the appeal of non-yielding assets like gold.
Among other precious metals, platinum gained 0.3 percent to $2,175.32 per ounce, while palladium rose 0.6 percent to $1,646.17 per ounce.
Gold prices have now extended losses for a second straight session, largely due to the stronger dollar and rising oil prices.
On the domestic futures market, gold on the Multi Commodity Exchange (MCX) ended the previous session slightly higher at ₹1,61,967 per 10 grams, while silver futures rose 0.27 percent to ₹2,69,211 per kilogram.
Analysts suggest MCX gold may find support near ₹1,59,500 per 10 grams, while resistance is seen around ₹1,63,200.
In India’s physical market, gold prices continue to track global trends, currency fluctuations and expectations around US interest rates. Local prices also vary depending on city-specific taxes, transport costs and jewellers’ demand.
Latest Gold Rates (per gram):
| City | 24K (₹) | 22K (₹) | 18K (₹) |
|---|---|---|---|
| Chennai | 16,496 | 15,121 | 12,951 |
| Mumbai | 16,332 | 14,971 | 12,249 |
| Delhi | 16,347 | 14,986 | 12,264 |
| Kolkata | 16,332 | 14,971 | 12,249 |
| Bengaluru | 16,332 | 14,971 | 12,249 |
| Hyderabad | 16,332 | 14,971 | 12,249 |
| Kerala | 16,332 | 14,971 | 12,249 |
| Pune | 16,332 | 14,971 | 12,249 |
| Vadodara | 16,337 | 14,976 | 12,254 |
| Ahmedabad | 16,337 | 14,976 | 12,254 |
Silver Prices in India
Silver prices in India were trading around ₹2,89,900 per kilogram, while Silver 925 (sterling silver) was quoted near ₹2,89,000 per kilogram.
City-wise Silver 999 rates (per 10 grams) were broadly uniform across major cities:
- Delhi: ₹2,899
- Mumbai: ₹2,899
- Kolkata: ₹2,899
- Chennai: ₹2,899
Silver prices are often more volatile than gold because the metal is widely used in industrial applications, in addition to being a popular investment asset.
