Domestic consumption and gems and jewellery exports are expected to face stress from higher inflation and USD strength. Experts recommend a sell-on-rallies approach, with gold resistance at ₹1,52,000 and silver at ₹2,60,000, signaling continued downside pressure in the near term. | Photo Credit: iStockphoto

Gold and silver contracts on the Multi-Commodity Exchange hit lower circuits on Monday, extending a sharp multi-week selloff as rising US Treasury yields, a stronger dollar, and elevated rate-hike expectations continued to overwhelm any safe-haven support from the ongoing West Asia conflict.

Technical indicators signal bearish momentum

MCX Gold, currently priced at ₹1,44,800, has fallen over 8 per cent in the past week alone, slipping below its 9-week exponential moving average for the first time since June 2025 — a development analysts at Axis Direct described as a clear bearish signal. The RSI has also dropped below 60, indicating strong downside momentum. COMEX Gold has shed more than 10 per cent over the same period, recording its steepest weekly decline in decades, settling below $4,500.

MCX Silver has been hit harder, extending its losing streak to a fourth consecutive week. The contract, last traded at ₹2,27,400, has fallen more than 12 per cent over the past week and is now trading below its 9-week EMA, with the RSI also under 60. Spot silver on COMEX plunged over 15 per cent last week to settle below $70 for the first time since December 2025.

Rising rates and oil prices weigh on metals

The selloff is rooted in a paradox: the very conflict driving geopolitical anxiety is also the force undermining metals prices. The West Asia escalation has pushed crude oil sharply higher, stoking inflation fears and prompting markets to price in a 50 per cent probability of a US Federal Reserve rate hike by October. Traders are also pricing in at least three rate hikes each from the European Central Bank and the Bank of England in 2026.

“The war has heightened concerns about energy supply disruptions, pushing oil prices higher and reinforcing inflation pressures,” said Ross Maxwell, Global Strategy Operations Lead at VT Markets. “This has led to increasing expectations that central banks will keep interest rates elevated for longer, strengthening the USD and raising real yields. These factors tend to weigh on precious metals.”

Domestic industry braces for impact

From the domestic industry perspective, the price drop is already creating stress. “The disrupted oil supply has led to a rise in the price of crude, which is being perceived as a major inflationary trigger,” said Colin Shah, MD of Kama Jewellery. “Interest rates are set to rise and will directly impact domestic consumption. The strengthening of the USD is also pushing investors away from the yellow metal.”

Shah added that gems and jewellery exports were likely to bear the brunt of the current turmoil, though he expressed hope that tensions would ease and economies would stabilise.

Analysts recommend cautious approach amid volatility

Analysts note that the correction, while severe, may not signal a structural reversal. Maxwell said a prolonged conflict could eventually turn supportive for both metals, with persistent inflation and fiscal strain reinforcing gold’s store-of-value role over time. Silver, he added, may initially lag if economic growth weakens but could benefit later from both inflation hedging and industrial demand.

For now, however, the near-term bias remains firmly negative. Axis Direct’s weekly commodity outlook, authored by analysts Rajesh Palviya, Deveya Gaglani, and Amith Madiwale, recommends a sell-on-rallies strategy for both MCX Gold and MCX Silver, with gold facing resistance at ₹1,52,000 and silver at ₹2,60,000.

Published on March 23, 2026