Gold and silver prices decline sharply amid global sell-off

Gold prices in Delhi fell by Rs 3,200 to reach a 10-month low of Rs 1.42 lakh per 10 grams, marking a continuation of losses for a second consecutive session. The price of gold, with 99.9% purity, decreased from Rs 1,45,200 per 10 grams to Rs 1,42,000, according to the All India Sarafa Association. Silver prices also declined, dropping Rs 4,200 to Rs 1,86,000 per kilogram from the previous close of Rs 1,90,200 per kg.

Rahul Khetawat, senior vice-president and fund manager at 360 ONE Asset, attributed the decline in gold and silver prices to rising energy costs, which have heightened inflation concerns, along with hawkish statements from the US Federal Reserve. These factors have tempered expectations for monetary easing, exerting pressure on precious metals and leading to price corrections.

In international markets, spot gold fell by $145.84, or nearly 4%, closing at $3,875.55 per ounce, its lowest level in over a year. Spot silver also dropped $3.04, or 6%, settling at $49.12 per ounce. Manav Modi, a commodities analyst at Motilal Oswal Financial Services Ltd, noted that the increase in oil prices and persistent inflation have revived expectations for a rate hike by the Federal Reserve in December, reinforcing the case for sustained higher interest rates.

Modi highlighted that an equity market downturn driven by artificial intelligence developments has led to forced liquidations and cash-raising pressures, further impacting silver due to its industrial applications. Additionally, reports from China indicated that investors may be selling gold to raise cash, although this has not been confirmed. Speculative short positions have also increased ahead of the US midterm elections, with President Donald Trump's majority potentially influencing future bullion price trends.