Gold and Silver Prices Decline Amid Strengthening US Dollar

Precious Metals Retreat Amid Strengthening US Dollar

On 11 March, precious metals edged lower as the US dollar resumed gains, making greenback-priced commodities more expensive for other currency holders. The April futures contract on COMEX Gold declined by $87 to a day's low of $5,155.9 per troy ounce, erasing half of the previous session's gains. The May silver contract on COMEX Silver also fell, dropping $5 per troy ounce to reach the day's low of $84.55.

US Dollar Index regained strength, climbing to 99.42 as the conflict with Iran showed no signs of easing and energy prices continued to rise. Inflation data for February came in line with forecasts, showing stable but above-target CPI. However, concerns have mounted that higher energy prices will fuel inflation in March, as Brent crude prices have surged 26% in March so far.

The US central bank is scheduled to meet later in March, where policymakers are widely expected to hold rates steady, with traders anticipating only one 25-basis-point cut, possibly in September. Recent labour market data has rattled investors, with the economy unexpectedly shedding jobs in February and the unemployment rate rising.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Gold is often viewed as a long-term inflation hedge, but it typically performs well in low-interest-rate environments because it yields no income. Middle East tensions remain elevated as attacks continue, with missile strikes visible for the 12th day on Wednesday, disrupting energy flows and keeping global inflation fears alive.

In the domestic market, the gold futures contract on the Multi Commodity Exchange of India fell by ₹2,073 per 10 grams to reach the day's low of ₹1,61,230 per 10 grams. Silver futures also declined, falling by ₹12,752 per kilogram to reach ₹2,65,098.