Gold futures slide to monthly low as US dollar strengthens

Bullion weakens amid currency strength and rising crude, as investors turn cautious before global policy decisions and inflation outlook

Gold futures slumped to a one-month low on Tuesday, pressured by a stronger dollar and rising crude oil prices, which together dented investor sentiment in the bullion market. The decline comes amid mounting inflation concerns and expectations of tighter monetary policy from major global central banks. 

On the Multi Commodity Exchange of India, the most active June gold contract fell 1.4% to ₹1,49,615 per 10 grams after touching a low of ₹1,48,681. In global trade, gold on COMEX declined 2% to $4,604.8 per ounce, marking its lowest level in a month.Silver futures also tracked the downturn. 

The July contract on MCX dropped 1.5% to ₹2,43,266 per kg, while COMEX silver fell 2% to $74.03 per ounce, hitting a three-week low. Analysts attributed the weakness to the strengthening US dollar, which reduces the attractiveness of commodities priced in the greenback. 

Crude oil prices surged nearly 4% to above $100 per barrel on NYMEX, driven by supply concerns linked to tensions in the Strait of Hormuz. The rise in oil prices has fuelled inflation fears, prompting expectations of sustained higher interest rates globally. Gold typically acts as an inflation hedge, but higher interest rates reduce its appeal as a non-yielding asset. 

Market participants are also exercising caution ahead of policy decisions from key central banks, including the US Federal Reserve, European Central Bank, Bank of Japan, and Bank of England.

The Bank of Japan has already maintained its benchmark rate at 0.75%, though dissent among policymakers highlighted emerging inflation risks. Analysts said that sustained energy price pressures could keep central banks on a hawkish path, weighing further on bullion prices.

In the near term, gold futures are expected to remain volatile, with MCX prices seen in the ₹1,48,000–₹1,52,500 range, while global prices may stay under pressure unless the dollar weakens or geopolitical tensions ease. Looking ahead, bullion is likely to remain under pressure as currency strength and elevated energy costs shape investor sentiment.