Gold and Silver Prices Plunge in India as Equities Rally, Rupee Strengthens; Fed Comments Add Pressure

Gold prices in India fell for the third consecutive session on Thursday, sliding by Rs 960 to Rs 1.53 lakh per 10 grams in the national capital, as a rally in domestic equities and an appreciating rupee eroded the safe-haven appeal of precious metals. According to the All India Sarafa Association, gold of 99.9% purity declined to Rs 1,53,440 per 10 grams (inclusive of taxes) from Wednesday's closing of Rs 1,54,400. Silver witnessed even heavier selling pressure, plunging by Rs 6,660 to Rs 2,48,740 per kilogram (inclusive of taxes), down from the previous session's Rs 2,55,400.

Analysts attributed the decline to investor rotation away from bullion amid firm domestic stock markets and a stronger rupee against the US dollar, even as global precious metal prices saw a modest rebound. Market participants were also assessing the implications of the recent US Federal Reserve policy decision and comments from newly appointed Fed Chair Kevin Warsh, which hinted at the possibility of an interest rate hike in 2026 if the US economy remains resilient. Such hawkish signals typically strengthen the dollar and weigh on non-yielding assets like gold and silver.

"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," said Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities. He added that the Fed's assessment of steady economic growth and a healthy labour market further bolstered the dollar and pressured bullion.

Globally, spot gold edged up marginally to USD 4,266.47 per ounce, while silver gained 0.38% to USD 68.17 per ounce. The uptick was supported by a slight easing of geopolitical tensions following the digital signing of a Memorandum of Understanding between US President Donald Trump and Iranian President Masoud Pezeshkian aimed at ending hostilities and establishing a framework for negotiations on Iran's nuclear programme. "Progress toward an interim peace agreement between the United States and Iran has helped ease geopolitical risks and inflation concerns, providing some support to bullion," noted Saumil Gandhi, Senior Analyst – Commodities at HDFC Securities.