Precious Metals Rally as US Dollar Weakens

Market Overview

On 17 March, precious metals experienced a significant surge in buying activity, driven by a decline in the US dollar. The $5,049 per troy ounce high on the COMEX gold April futures contract and the $82.76 per troy ounce high on the COMEX May silver contract reflect this trend.

Central Bank Meetings and Rate Outlook

Read also: Gold and Silver Prices Decline Amid Strengthening Dollar and Inflation Concerns

Major central banks, including the US Federal Reserve, the European Central Bank, the Bank of England, and the Bank of Japan, will announce their policy decisions this week. While rate hikes are expected to remain unchanged, investors will focus on clues on how policymakers will respond to the conflict in the Middle East.

Inflation Concerns and Oil Prices

The surge in crude oil prices since the US and Israel began their bombardment of Iran has raised concerns about inflation and economic growth. Brent crude prices have risen to $139 per barrel, fueling inflation concerns and raising questions about whether global economies are returning to a 2022-style environment.

Currency Market

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The US dollar index, which measures the greenback against a basket of six major currencies, was down 0.26% at 99.56. The dollar had climbed above 100.3 on Friday, its highest level since mid-May 2025, and ended last week up 1.66%.

Domestic Market

In the domestic market, the MCX gold April futures contract gained ₹1,844 per 10 grams to reach a day's high of ₹1,57,580 per 10 grams. The MCX May silver futures contract rallied ₹6,367 per kilogram to hit a day's high of ₹2,62,899.