Gold and Silver Tumble Ahead of Key US Inflation Figures as Rate Hike Fears Mount Precious metals face heavy selling pressure across global and domestic markets as rising energy costs and upcoming US CPI data strengthen expectations of a Federal Reserve rate hike. Precious metals experienced a sharp downturn across domestic and global commodity markets as traders prepared for the release of critical US Consumer Price Index figures. Both gold and silver saw significant declines as broader financial markets recalibrated expectations ahead of next week's monetary policy decisions by the US Federal Reserve. Rising Treasury yields and elevated energy costs have dampened the appeal of non-yielding assets. Domestic Futures Market: MCX Gold and Silver Under Pressure Trading on the Multi Commodity Exchange reflected deep losses for both major precious metals during Friday's session. MCX gold plunged to trade around Rs 1,51,800 per 10 grams. In early trading hours, the yellow metal had hit an intraday trough of Rs 1,50,695 per 10 grams, down notably from the preceding session's close of Rs 1,52,341 per 10 grams, translating into a decline of over Rs 1,000. Silver mirrored the weakness with an even sharper plunge. On the MCX, silver crashed by more than Rs 2,100, reaching an intraday low of Rs 2,30,270 per kilogram. It later staged a slight recovery to hover above the Rs 2.32 lakh per kilogram mark, tracking broad selling in international markets. Global Spot Rates and Weekly Performance In international trade, spot gold traded marginally higher on the day but remained firmly beneath the $4,400 per ounce threshold, struggling around $4,330 per ounce. This followed a steep 2 percent drop in the prior session. The metal is currently poised to end the week lower by more than 2 percent, putting it on course for a third consecutive weekly retreat. Spot silver experienced even deeper losses, trading near $63.5 per ounce after tumbling over 5 percent in the prior trading session. The breakdown below $64 per ounce highlights waning investor appetite for bullion ahead of crucial economic indicators from the United States. Rate Hike Odds Rise on Accelerating US Producer Prices The primary catalyst behind the sell-off in precious metals is the anticipation surrounding US inflation readings. August data showed US producer prices accelerated, driven higher by wholesale energy costs amid the conflict involving Iran. Consequently, financial markets are now pricing in approximately a 71 percent probability that the Federal Reserve will raise interest rates by 25 basis points at its upcoming policy meeting, compared to a 61 percent probability estimated prior to the PPI release. Compounding the pressure, US Treasury yields climbed sharply following lower-than-expected bond purchases by the US Treasury Department during its initial expanded buyback operation. Because gold and silver generate no yield or interest, climbing bond yields elevate the opportunity cost of holding bullion, prompting portfolio reallocations away from precious metals. Crude Oil Dynamics and Broader Commodity Performance Surging crude oil prices driven by escalating tensions between the US and Iran have further intensified inflation anxieties. While crude prices saw a slight technical correction following a robust rally, they remain firmly elevated. US WTI crude held above $102 per barrel, and global benchmark Brent crude traded near $108 per barrel, while gasoline and natural gas prices also saw price adjustments. Across the broader commodity spectrum, gold, silver, and lead stood out among the worst performers on the MCX. In contrast, base metals including zinc and copper recorded robust gains, demonstrating clear divergence in industrial versus precious commodity demand ahead of the decisive CPI inflation print. What this means for you The sharp pullback in gold and silver prices directly impacts retail jewellery buyers, commodity traders, and fixed-income investors. • For Retail Jewellery Buyers: Domestic retail prices are set to ease following the sharp drop on the futures exchange. Those planning purchases for weddings or festivals can expect lower procurement costs per 10 grams. • For Commodity Traders: Bullion futures contracts face heightened volatility and potential margin calls. Market participants should manage exposure carefully ahead of the US CPI release and the Fed meeting. • Inflation Concerns: Elevated crude oil levels above $100 per barrel threaten to keep transportation and fuel costs high. Consumers could see broader inflationary pressure on household expenditure. • For Fixed-Income Investors: Surging US Treasury yields increase the appeal of debt instruments relative to non-yielding bullion. Investors seeking stable returns may favor bonds over precious metals in the short term. Why this happened The sharp retreat in gold and silver prices stems from heightened expectations of a US Federal Reserve interest rate hike and surging Treasury yields. • Accelerating Producer Prices: Higher wholesale energy expenses pushed August US PPI higher, renewing persistent inflation fears across global financial markets. • 71% Probability of Fed Rate Hike: Traders increased the odds of a 25-basis-point rate hike next week from 61% to roughly 71% following the robust producer price data. • Rising Treasury Yields: US Treasury yields jumped after lower-than-expected purchases during the government's buyback operation, weighing heavily on non-yielding bullion. • Elevated Crude Oil Prices: Ongoing geopolitical friction between the US and Iran kept crude above $100 per barrel, reinforcing expectations for tighter central bank policies. Questions & Answers 1. How much did MCX gold and silver prices fall? MCX gold fell to Rs 1,51,800 per 10 grams after touching an intraday low of Rs 1,50,695, while silver plunged to an intraday low of Rs 2,30,270 per kg. 2. Where are spot gold and silver currently trading internationally? Spot gold is hovering near $4,330 per ounce, while spot silver is trading around $63.5 per ounce, down from above $64. 3. What are the market expectations for the Federal Reserve rate hike? Markets are pricing in approximately a 71% chance of a 25-basis-point rate increase next week, up from 61% prior to the latest PPI release. 4. What is the current level of crude oil prices? US WTI crude is trading above $102 per barrel, while global benchmark Brent crude is trading near $108 per barrel. https://trendkia.com/en/money/us-mudrasphiti-ankaron-se-pahale-gold-aura-silver-dharama-mcx-para-bhari-giravata-31122 TrendKia — Har trend, sabse pehle.