Gold and Silver Prices Decline Amid Higher US Producer Price Index

Precious Metals Retreat Amid Higher US Producer Price Index and Crude Oil Prices

Key Figures:

• $4,837: lowest level of COMEX gold futures contract on 18 March
• 7.4%: drop in the yellow metal in March so far
• 12%: year-to-date returns for gold
• $76.63: day's low of May COMEX silver contract
• 17.7%: drop in silver in the current month so far
• 8.9%: year-to-date returns for silver
• 0.7%: rise in February US Producer Price Index (PPI)
• $109: Brent crude oil price after a 9% surge
• ₹1,51,550: day's low of April gold futures contract on MCX
• ₹2,42,803: day's low of May silver futures contract on MCX

Market Analysis

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The US Producer Price Index (PPI) rose 0.7% in February, exceeding expectations and putting pressure on precious metals. The COMEX gold futures contract fell $171 to reach $4,837 per troy ounce, breaking below the key $5,000 mark. The May silver contract on COMEX also crashed, falling $4.30 per troy ounce to reach a day's low of $76.63.

The higher-than-expected PPI comes ahead of the Federal Reserve policy outcome, which is expected to leave rates unchanged for a second time. A rising US dollar is making dollar-priced commodities more expensive for other currency holders, further pressuring precious metals.

In the domestic market, the April gold futures contract on MCX dropped by ₹4,435 per 10 grams to the day's low of ₹1,51,550, marking the lowest level since 17 February. The May silver futures contract also eased by ₹10,310 per kilogram to ₹2,42,803, the white metal's last seen level on 20 February.

Market Outlook

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