Gold Price Declines Amid Strengthening Dollar and Rising Crude Oil Prices
Gold Prices Decline on MCX Amid Rise in US Dollar and Crude Oil Prices
On Friday, 24 April, the gold price on the Multi Commodity Exchange (MCX) experienced a decline in the morning trade. This decline can be attributed to the rise in the US dollar, which has been driven by elevated crude oil prices. The uncertainty surrounding the US-Iran peace deal has also contributed to this development.
As a result, MCX gold June futures saw a decline of 0.32% to ₹1,51,280 per 10 grams. MCX silver May futures also experienced a decline of 0.47% to ₹2,40,373 per kg around 9:05 am. The international gold prices have been under pressure, set for their weekly decline, as higher crude oil prices have increased inflationary risks. This, in turn, has fanned speculation that interest rates may remain at a higher level for a longer period.
The rise in the US dollar has been a significant factor in the decline of gold prices. The US dollar has gained nearly 1% this week, weighing heavily on gold prices. Additionally, the benchmark 10-year U.S. Treasury yield has risen by more than 2% this week, increasing the opportunity cost of holding gold, a non-yielding asset.
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
| Comparison of Gold Prices | MCX Gold June Futures | MCX Silver May Futures |
|---|---|---|
| April 24 Price | ₹1,51,280 per 10 grams | ₹2,40,373 per kg |
| Change from Previous | -0.32% | -0.47% |
Investor Takeaway
Investors should be cautious of the impact of rising crude oil prices on inflation and interest rates.
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