Gold lost its shine in the Indian market on Wednesday, with its futures price sliding to a three-month low. The biggest reasons were a stronger US dollar and growing expectations that American interest rates will stay elevated. Together, these two factors put the brakes on demand for the yellow metal.
On the Multi Commodity Exchange (MCX), the August delivery contract for gold fell by Rs 1,834. It ended 1.25 per cent lower at Rs 1,44,695 per 10 grams. Trading during the session covered 9,508 lots.
When Gold Was Last At This Level
The contract had last traded near this level on March 23, when it settled at Rs 1,45,069 per 10 grams. Market watchers say traders are now pricing in a tighter US monetary policy path. That same shift has lent support to the dollar and pushed US Treasury yields higher. Both of these conditions typically reduce investor appetite for precious metals.
Gaurav Garg, Research Analyst at Lemonn Markets Desk, tied the slide to currency moves. "Gold prices fell in the domestic market amid a strengthening in the US dollar and prevailing concerns over the Federal Reserves policies, which have dampened the demand for bullion," Garg said. As bets firmed up that rates would remain high, traders turned cautious.
Overseas Markets Also Slipped
The weakness was not limited to India and was felt in overseas markets too. On the Comex, gold futures slipped below USD 4,100 per ounce, breaching that level for the first time in nearly eight months. The metal fell USD 51.55, or 1.24 per cent, to USD 4,097.85 per ounce. It had last traded near this level on October 28, 2025.
The Global Triggers Behind The Selloff
Analysts pointed to several global reasons behind the selling. Renisha Chainani, Head of Research at Augmont, said the losses continued despite a temporary peace deal between the US and Iran. She attributed part of the fall to a risk-off mood that set in after a sharp correction in AI-linked stocks. Chainani also flagged the increasingly hawkish messaging from the Federal Reserve.
According to Chainani, markets are placing the probability of a rate hike in December 2026 at 86 per cent. That stronger rate outlook lifted the dollar index past 101, adding further pressure on bullion prices. At the same time, doubts lingered over how durable the understanding between the US and Iran really is, with mixed statements from both sides keeping uncertainty alive.
What Is Happening Between Iran And The US
US President Donald Trump said on Tuesday that Iran had agreed to indefinite nuclear inspections. Tehran, however, quickly rejected the claim, raising fresh questions over the future of the deal. Chainani said investors are now watching America's upcoming inflation data. The US Personal Consumption Expenditures (PCE) figures are due on Thursday, and traders are hoping they will offer clues on policy and the direction of gold prices.
