Gold Falls 4.2% to $4,163 as Fed Rate-Hike Bets and Stronger Dollar Erase Festival Gains; Silver Slips Below $61

Mumbai, Oct 3: Gold and silver prices came under heavy pressure during the week ended 2 October 2026. International gold futures recorded their sharpest weekly fall in more than three months as expectations of another US Federal Reserve rate hike, a stronger US dollar and rising Treasury yields weighed on precious metals.

The week started with MCX gold trading around ₹1,46,804 per 10 grams and December silver at about ₹2,27,442 per kg. By Thursday, 1 October, December gold futures had recovered slightly to around ₹1.49 lakh per 10 grams, while December silver remained lower at about ₹2.24 lakh per kg.

The domestic bullion market remained closed on Friday, 2 October, because of the Gandhi Jayanti holiday.

US Fed Rate-Hike Bets Rise to 71% as Stronger Dollar Adds Pressure on Gold

The biggest factor behind the week’s fall in precious metals was the sharp change in expectations around US interest rates.

The Federal Reserve had raised its policy rate by 25 basis points to 3.75%–4.00% in the previous week. At the time, 16 of the 18 policymakers indicated that they expected at least one more rate hike this year.

By 29 September, markets were pricing in around a 71% chance of another rate hike in October, according to Kedia Advisory. The US dollar index moved closer to 101, while the US 10-year Treasury yield climbed above 5.20%.

Also Read: How to Invest in Gold for Beginners: Simple Start Guide 

These moves made interest-bearing assets more attractive compared with gold and silver, which do not generate interest income.

Higher crude oil prices also added to inflation concerns. Brent crude was trading around $109 a barrel on 29 September before easing later. This added to expectations that the US central bank could keep monetary policy tighter for longer.

The effect was clear across financial markets. Higher expectations of a Fed rate hike pushed Treasury yields higher and supported the dollar. A stronger dollar and higher yields, in turn, reduced demand for non-yielding assets such as gold and silver.

Gold Drops 4.2% to $4,163 as Silver Falls 5.3% Below $61

Gold and silver both came under pressure at the start of the week. On Monday, 28 September, gold fell by around 4%, slipping below $4,200 an ounce. Silver dropped more than 5% and moved below $62 an ounce. By 30 September, spot gold was consolidating around $4,177 an ounce, while silver was holding near $61.

Gold showed some recovery in early trading on 1 October. Spot gold moved above $4,155 an ounce, while US gold futures gained around 0.10% to $4,191 an ounce. By the end of the week on 2 October, spot gold had settled at around $4,163 an ounce, leaving it down about 4.2% for the week.

Silver also remained under pressure. International silver fell 4.6% to $61.34 an ounce on 28 September and struggled to regain ground during the rest of the week. COMEX December silver futures settled at around $61.72 an ounce.

The gold-silver ratio also moved higher, rising from 65.8 at the start of the week to 68.9 by the end. This indicated that silver had fallen more sharply than gold during the period.

Monday, 28 September saw the biggest one-day decline for both metals, with gold falling around 4% and silver losing more than 5%.

MCX Gold Ends Week Near ₹1.49 Lakh; December Silver Holds ₹2.24 Lakh

On the Multi Commodity Exchange (MCX), the December gold contract traded at ₹1,46,385 per 10 grams on 29 September, down ₹419 (0.29%), while the October contract declined to ₹1,46,500. By 30 September, MCX gold had rebounded to ₹1,49,840 per 10 grams, a gain of ₹1,250 (0.84%) from the previous close. On 1 October, December gold futures were trading at ₹1.49 lakh per 10 grams, up 0.51%. The MCX December silver contract fell to ₹2.25 lakh per kg on 29 September, down 0.93% and approximately ₹2,064 per kg lower than the previous close of ₹2.27 lakh.

Also Read: How to Invest in Gold Online

By 30 September, silver had recovered marginally to ₹2,25,970 per kg, up 0.48%. On 1 October, December silver futures traded at ₹2.24 lakh per kg, up 0.40%. Open interest in silver declined 4.42% to 14,756 contracts while prices gained ₹1,214, indicating some reduction in bearish positions. MCX Gold Mini and Silver Mini contracts tracked the benchmark contracts closely, with the Silver Mini seeing marginally lower volumes than the December contract.

24K Gold in Delhi Surges ₹500 to ₹1,49,800 Despite Global Weakness

Domestic physical gold prices in India exhibited relative resilience compared with international markets, cushioned by a weaker rupee. On 29 September, MCX gold futures slumped below the ₹1,50,000 per 10-gram mark, while silver slipped under its key support of ₹2,30,000 per kg. By 30 September, 24-carat gold in India was priced at ₹149,840 per 10 grams, reflecting a gain of ₹1,250 (0.84%). In Mumbai, 10 grams of 24K gold was quoted at ₹148,420, while 22K gold stood at ₹135,950.

In the national capital, gold prices rose for the second straight session on 1 October, gaining ₹500 to ₹1,49,800 per 10 grams as a weaker rupee and a firm global trend supported the metal. The rupee opened at 96.05 per dollar on 29 September, down 7 paise from Monday’s close of 95.98, amplifying the domestic impact of international price movements. These retail prices typically include GST and making charges, and therefore exceed exchange-quoted prices.

Silver Falls ₹5,000 in Delhi; MCX December Contract Tests ₹2.24 Lakh Support

Silver prices across Indian cities mirrored the international decline. In the national capital, silver prices fell ₹5,000 to ₹2.32 lakh per kg, inclusive of taxes, from ₹2.37 lakh per kg on Friday, 25 September. On 30 September, silver in India was priced at ₹226 per gram or ₹225,970 per kg, reflecting a gain of 0.48% from the previous close.

Also Read: How to Invest in Silver: 6 Best Ways (2026) 

By 1 October, silver had dropped to ₹2,350 per 10 grams in most parts of India, translating to ₹235 per gram or ₹2,35,000 per kg. MCX December silver opened largely steady at ₹2,26,487, up 0.25%, holding above the ₹2,24,000 support level. The contract found immediate resistance at ₹2,27,000–₹2,28,000, followed by ₹2,32,000–₹2,33,000, with support at ₹2,24,000–₹2,23,000. Mumbai and Delhi quoted marginally different retail rates due to local dealer premiums and transportation costs, though the underlying MCX price remained the same across cities.

Rupee Breaches 96.05 as Dollar Strengthens; MCX Prices Cushioned

The Indian rupee opened at 96.05 per dollar on 29 September, down 7 paise from Monday’s close of 95.98, as higher US bond yields and elevated oil prices weighed on the domestic currency. The rupee’s depreciation provided a partial cushion to domestic gold and silver prices, preventing them from falling as sharply as international benchmarks. This dynamic was particularly evident on 1 October, when gold rose ₹500 per 10 grams in Delhi despite international spot gold trading just above $4,155 per ounce.

The weaker rupee increased the cost of imported bullion, offsetting some of the decline in dollar-denominated prices. In situations where international gold rose but Indian gold rose more, the rupee’s depreciation amplified gains; conversely, when international gold fell but Indian prices remained stable or rose, the rupee’s weakness offset the decline. This transmission mechanism was clearly visible throughout the week.

Gold ETFs Record 10th Consecutive Week of Positive Inflows

Investments in physically backed gold exchange-traded funds (ETFs) were positive for the tenth consecutive week, with $1.72 billion invested and redemptions to the tune of $1.59 billion. The persistent inflows, despite price volatility, suggested sustained institutional and retail interest in gold as a portfolio diversifier. The global silver market remained structurally undersupplied for a sixth consecutive year, with 762 million ounces drawn from stocks since 2021.

The 2026 deficit was forecast to widen to 46.3 million ounces from 40.3 million ounces in 2025, despite a 2% decline in total demand. Industrial fabrication was projected to fall 3% to a four-year low amid weaker economic growth risks, while coin and bar demand was expected to rise 18%, supported by stronger US buying. Silver’s dual role as both a precious and industrial metal meant that weakening global manufacturing data weighed on industrial demand expectations, even as investment demand provided some support.

China’s Central Bank Extends Gold Buying Streak to 22 Months

The People’s Bank of China reported another 20.2-tonne purchase in August, extending its buying streak to 22 consecutive months and lifting reported holdings to 2,387 tonnes. The August purchase was the largest monthly increment since October 2023, according to official data. The Bank of Korea also announced plans to purchase physical gold in the fourth quarter of 2026, resuming gold investment after 13 years.

These central bank purchases provided a structural floor to gold prices even as speculative and ETF flows turned volatile. Central bank demand has been a consistent supportive factor for gold throughout 2026, with official-sector buying absorbing a significant portion of global supply.

US Non-Farm Payrolls Miss at 29,000 vs 84,000 Estimate; Gold Rebounds

The September US non-farm payrolls report, released on 2 October, showed job creation of just 29,000, far below the market estimate of 84,000 and a sharp deceleration from the 162,000 added in August. The unemployment rate rose to 4.2%, exceeding the forecast of 4.1%. The weak employment data triggered a sharp retreat in the dollar and Treasury yields, prompting gold to rebound from its weekly lows.

 The disappointing jobs report cooled expectations of an immediate Federal Reserve rate hike, with markets reassessing the probability of tightening in the coming months. The data released after Indian market hours on Friday meant its full impact on domestic bullion prices would be reflected in the following week’s trading. Geopolitical tensions in the Middle East and the ongoing Russia-Ukraine conflict remained background factors, though their safe-haven impact was largely overshadowed by US monetary policy dynamics during the week.

India Reports Temporary Silver Import Curbs

A notable India-specific development emerged on 29 September, when government sources indicated that temporary restrictions on silver imports were being considered or applied, while there was no gold-import quota under consideration.

Check list of Silver ETFs in India

Import-related developments matter because India relies substantially on overseas bullion supplies. Changes in import availability can affect domestic physical premiums, particularly when international prices and local demand are already volatile.

No new gold import quota was identified during the week in the sources reviewed, so gold’s domestic movement remained primarily linked to international bullion prices, the rupee and local market pricing.

Gold-Silver Ratio Widens as Silver Falls More

Using the spot prices from the same historical series, the gold-silver ratio was approximately 66.66 at the 25 September close, based on gold at $4,287.25 and silver at $64.31. At the 2 October close, the ratio was approximately 68.37, based on gold at $4,186.37 and silver at $61.24.

The ratio therefore increased by about 1.71 points, or 2.6%. The change occurred because silver declined by a larger percentage than gold during the reporting period. The sharpest divergence appeared after the 28 September sell-off, when silver fell more than 5% in the spot market while gold declined about 4%.

The week’s precious metals decline was driven by a stronger dollar, elevated Treasury yields above 5.2%, and hawkish Fed expectations, with silver underperforming gold as the gold-silver ratio widened to 68.9. The weak US jobs report on 2 October introduced fresh uncertainty into the rate outlook. Market participants will monitor the RBI policy decision on 7 October and the trajectory of US yields and the dollar for directional cues.