MCX Gold Price Falls Below ₹1.59 Lakh per 10 Grams, Silver Prices Slip 2% Ahead of RBI Policy

Global Bullion Prices Weigh Down Indian Market Ahead of RBI Monetary Policy Announcement

The Multi Commodity Exchange (MCX) in India saw gold and silver prices opening lower on Friday, in line with global weakness in bullion prices and ahead of the Reserve Bank of India's (RBI) monetary policy announcement later in the day.

MCX gold rate for August futures contracts opened lower by ₹949, or 0.59%, at ₹1,58,598 per 10 grams, compared to its previous close of ₹1,59,547. Similarly, MCX silver price for July futures contracts opened lower by ₹4,772, or 1.8%, at ₹2,60,024 per kg, as against its previous close of ₹2,64,796.

At 9:05 AM, MCX gold price was trading at ₹1,58,330 per 10 grams, down by ₹1,217, or 0.76%. MCX silver price traded lower by ₹3,597, or 1.36%, at ₹2,61,199 per kg.

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In the international market, gold prices declined due to concerns over the escalating US-Iran war in the Middle East, which dampened hopes for a peace deal amid rising inflation and interest rate-hike fears. Spot gold price fell 0.5% to $4,452.20 per ounce, a decline of 1.8% for the week so far. US gold futures for August delivery dropped 0.6% to $4,478.50. Spot silver prices also dropped 1.4% to $72.89 per ounce.

The Iran-backed Hezbollah militia rejected a new ceasefire in Lebanon, and Israel said it would not withdraw troops from the country, undermining US President Donald Trump's efforts to halt fighting there to forge peace with Tehran, according to Reuters.

While gold is seen as a hedge against inflation, higher interest rates tend to weigh on the non-yielding metal. Investors will focus on the RBI monetary policy and repo rate decision later in the day, as the June RBI MPC meeting takes place against a backdrop of a challenging macroeconomic environment.

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Markets are pricing in a US Federal Reserve rate hike before year-end, with a 51% chance of a move by December, according to CME Group's FedWatch tool. Investors now await the May US nonfarm payrolls data, due later in the day, to gauge the Fed's monetary policy path.