Gold & Silver Weekly Wrap: Fed Haw‌‌kishness Triggers 1.5% Drop to $4,138/oz, Er‌‌a‌si‌‌ng Mid-Week Gains

Mumbai, June 21: Precious metals saw extreme volatility this week, as markets swung between sharp gains, driven by optimism over peace between the US and Iran, and a severe sell-off amid hawkish signals from the US Federal Reserve.

By the end of the week, the Comex gold futures had largely given u‌‌p their m‌‌id-week gains to settle wit‌‌h a w‌ee‌kly loss of 1.5% at an intrada‌‌y low of $4,138 per ounce for the week. Silve‌‌r suffered an even shar‌‌per correction and dropped almost $3 to $63.35 per ounce, registering its sixth weekly loss.

In the domestic market, MCX gold futures (August contract) plunged by 3.2% to ₹1,50,528 per 10 grams, whereas silver futures (July contract) fell by almost 1% to ₹2,46,186 per kilogram.

US-Iran Peace Framework Sparks Monday Rally in Gold and Silver

The trading week started on a high note, with safe haven assets rallying sharply on the back of a preliminary peace agreement framework between the United States and Iran. On Monday, 15 June, Comex gold futures advanced 2.24%, or $95.10, to settle at $4,333.90 per ounce. Meanwhile, Comex silver rallied even more sharply, up 3.51%, or $2.39, to $70.36 per ounce.

This optimism was driven by reports that Washington and Tehran reached an interim understanding for reopening the Strait of Hormuz, eliminating fears about disruptions of oil shipments. On the other hand, the Dollar Index fell to its lowest in 10 days, providing additional support for dollar-denominated bul‌l‌‌i‌‌on.

In India, MCX gold future‌‌s rose ₹2,242 or 1.49% to approximately ₹1,52,000 for 10 grams of gold, while the futures price of MCX silver increased by ₹6,066 or 2.46%, which was about ₹2,52,000 for 1 kilogram of silver. The spot gold price in Delhi increased by ₹2,500 to ₹1,59,400 per 10 grams, and si‌‌l‌‌v‌‌er surged ₹5,000 to ₹2,60,700 per kilogram.

Profit-Booking and Fed Jitters Curb Mid-Week Gains

By Tuesday, 16 June, the initial euphoria began to fade as investors adopted a cautious stance ahead of the Federal Reserve’s policy meeting. Comex gold inched lower by 0.09% to $4,347.50 per ounce, while Comex silver ticked down by 0.27% to $70.270 per ounce. Spot gold, however, managed a modest gain of 0.48% to $4,332.23 per ounce.

Market participants engaged in profit-booking after the three-day winning streak, with analysts identifying support levels at $4,315–$4,270 and resistance at $4,385–$4,420. On the Multi Commodity Exchange (MCX), gold traded slightly lower at approximately ₹1,52,842 per 10 grams, while silver fell ₹1,457 or 0.5% to ₹2,50,001 per kilogram.

Fed Holds Rates but Signals Potential 2026 Hike, Triggering Sharp Reversal

The most significant event of the week unfolded on Wednesday, 17 June, when the Federal Reserve, under Chair Kevin Warsh, voted unanimously to keep the Fed funds rate unchanged at 3.50% to 3.75% – the fourth consecutive hold and the first unanimous decision since June 2025. However, the accompanying economic projections revealed growing internal divergence, with nine Fed officials now expecting at least one rate hike in 2026.

This hawkish tilt dramatically altered market sentiment. Although Comex gold edged up 0.13% to an intraday high of $4,369.80 per ounce and silver rose 0.46% to $70.335 per ounce on Wednesday, the groundwork for a reversal had been laid.

The Fed’s signal that rates may remain elevated for longer weighed heavily on non-yielding bullion, as higher interest rates diminish the appeal of gold and silver.

Post-Fed Sell-Off Accelerates as Dollar Strengthens

Thursday, 18 June, witnessed a decisive market reversal. Comex gold declined 0.94% or $41 to $4,340.40 per ounce, while Comex silver fell 1.74% or $1.232 to $69.535 per ounce. The Dollar Index surged as markets priced in higher odds of a rate hike, with CME FedWatch indicating an 87% probability of a December rate increase.

In India, Delhi spot gold fell for the third consecutive day, dropping ₹960 to ₹1,53,440 per 10 grams, while spot silver plunged ₹6,660 to ₹2,48,740 per kilogram. MCX gold fell ₹1,593 or 1.04% to approximately ₹1,52,000 per 10 grams. The strengthening rupee and robust domestic equities further prompted investors to rotate out of precious metals.

Friday Carnage: Gold Crashes $107, Silver Breaches $64

The selling pressure intensified on Friday, 19 June, as Comex gold futures plummeted $107 to an intraday low of $4,138 per ounce. Comex silver crashed nearly $3 to $63.35 per ounce. Spot gold dropped to $4,189.26, down 0.5%, while spot silver tumbled 3.14% to $65.795 per ounce, breaching the critical $66 level.

The sell-off was exacerbated by the postponement of scheduled US-Iran peace talks in Switzerland, which were delayed due to clashes between Israel and Iran-backed Hezbollah in Lebanon. Iran made a Lebanese ceasefire a precondition for advancing the preliminary agreement, introducing fresh geopolitical uncertainty.

In the domestic market, the correction was equally severe. Delhi spot gold crashed ₹2,840 to ₹1,50,000 per 10 grams, marking its fourth consecutive daily decline. Delhi spot silver hit a two-month low of ₹2,40,000 per kilogram. MCX gold (August) fell ₹2,269 to ₹1,49,309 per 10 grams, while MCX silver (July) plunged ₹5,371 or 2.3% to ₹2,32,201 per kilogram. In just two trading sessions, silver lost approximately ₹20,000 per kilogram, while gold shed about ₹7,000 per 10 grams. Gold and silver exchange-traded funds witnessed heavy selling, with losses extending up to 6%.

City-Wise Gold Price Fluctuations Across India

Domestic gold prices witnessed significant divergence across major cities during the week, with southern markets consistently commanding a premium over their northern counterparts. On 15 June, 24-carat gold in Delhi was recorded at ₹1,49,230 per 10 grams, while Mumbai and Kolkata traded at ₹1,49,080 and Chennai led the metros at ₹1,48,630.

By 19 June, the erosion in prices was pronounced across all centres. Chennai continued to record the highest 24-carat gold rate at ₹1,46,930 per 10 grams, followed by Hyderabad at ₹1,46,740 and Bengaluru at ₹1,46,620.

Mumbai quoted ₹1,46,500, Kolkata ₹1,46,310, and Delhi ₹1,46,130 per 10 grams for 24-carat gold. For 22-carat gold on 19 June, Chennai led at ₹1,34,686, followed by Hyderabad at ₹1,34,512, Bengaluru at ₹1,34,402, Mumbai at ₹1,34,292, Kolkata at ₹1,34,118, and Delhi at ₹1,33,953 per 10 grams.

On a per-gram basis, 24-carat gold on 19 June was priced at ₹14,965 in Delhi, ₹14,950 in Mumbai and Kolkata, and ₹15,217 in Chennai, reflecting the southern city’s persistent premium.

Silver Prices Decline Across Major Indian Cities

Silver prices mirrored the bearish trend in gold, with sharp corrections across all major urban centres. On 15 June, silver 999 was priced at ₹2,601 per 10 grams in Delhi, Mumbai, and Kolkata, while Chennai commanded a higher rate of ₹2,651 per 10 grams. By 19 June, silver had fallen to approximately ₹2,29,280 per kilogram nationally.

City-wise, Mumbai recorded silver at ₹2,30,510 per kg, Delhi at ₹2,30,120, Kolkata at ₹2,30,210, Chennai at ₹2,31,180, Hyderabad at ₹2,30,880, and Bengaluru at ₹2,30,700. The 3.5% decline in silver prices on 19 June alone underscored the metal’s heightened volatility compared to gold.

Indian Physical Demand Remains Subdued Amid Duty Burden

Despite lower domestic prices, physical demand for gold in India remained weak throughout the week. Buyers largely stayed on the sidelines, citing continued volatility, expectations of further price declines, and the impact of higher import duties introduced in May.

Jewellers reported widening discounts to approximately $54 per ounce over official domestic prices, compared with around $35 the previous week, reflecting tepid retail interest. The current effective duty structure of 15% (comprising a 10% basic customs duty and a 5% agriculture infrastructure cess) continued to inflate jewellery prices and curb discretionary purchases.

Industry participants also raised concerns over increased smuggling activities. However, some wholesalers and retailers began replenishing inventories at lower price levels, providing modest support.

ETF Outflows and Weak Global Cues Add to Bearish Pressure

An important development during the week was the confirmation that Indian gold exchange-traded funds experienced net withdrawals in May, marking the first monthly outflow in approximately one year. The outflows were attributed to investors booking profits after record-high prices, signalling growing caution among retail participants.

In China, demand weakened considerably, with the market shifting from a premium to a discount of approximately $4–$8 per ounce relative to global prices. Hong Kong traded near parity, while Japan recorded a small discount of about $0.25 per ounce. Singapore premiums ranged between a slight discount and approximately $1.80 per ounce, reflecting mixed regional sentiment.

The week’s price action underscored the acute sensitivity of precious metals to monetary policy signals, with the Federal Reserve’s hawkish tilt ultimately overriding geopolitical tailwinds. The strengthening dollar and elevated rate expectations are likely to remain key headwinds for bullion, while geopolitical developments in the Middle East could provide intermittent support. Market participants should closely monitor US economic data and Fed communications for further directional cues.

Source
https://silverprice.org/silver-price-india.html
https://goldprice.org/gold-price-india.html

Disclaimer