Bullion futures ease on hawkish Fed, firm rupee

Gold and silver prices fell sharply on Thursday in domestic and global markets after hawkish remarks in the minutes of the US Federal Open Market Committee’s April meeting raised fears of further interest rate hikes. 

A stronger rupee against the dollar also pressured bullion prices on the MCX. The most active June gold contract on MCX fell 0.8% to ₹158,764 per 10 gm, while July silver dropped 1.6% to ₹275,115 per kg. 

On COMEX, gold and silver contracts also traded lower. Analysts said US Federal Reserve officials signalled that more policy tightening could be needed if inflation remains above the 2% target, especially if the Iran conflict keeps energy prices elevated. 

Higher interest rates usually reduce the appeal of non-yielding assets like gold and silver. The rupee strengthened 0.6% against the US dollar to close at 96.2000, making imported bullion cheaper in the domestic market and adding pressure on prices.

However, analysts said losses may remain limited due to optimism over a possible US-Iran peace deal. US President Donald Trump said negotiations with Iran were in the “final stages”, which improved market sentiment and eased fears of prolonged geopolitical tensions.