Gold and silver prices in India extended their losses for a fourth consecutive session on Monday, following comments from US Federal Reserve Chair Kevin Warsh that strengthened expectations of higher interest rates. Over four trading sessions, gold has dropped by ₹9,500 per 10 grams, while silver has fallen by ₹7,700 per kilogram in three sessions.
Fed Chair comments reignite rate hike bets
Kevin Warsh’s remarks were interpreted as hawkish, prompting traders to increase the probability of further monetary tightening. Higher interest rates raise the opportunity cost of holding non-yielding assets such as gold, and they typically strengthen the US dollar and push bond yields higher — both of which are headwinds for precious metals. The market reaction was swift, with spot gold declining in international trade and domestic prices following suit.
Impact on Indian precious metals market
Indian gold prices are derived from international spot rates, with additional components such as import duties and local taxes. The ₹9,500 drop per 10 grams over four days is a significant move in absolute terms, reflecting the global shift in sentiment. Silver has seen an even sharper decline in percentage terms, falling ₹7,700 per kilogram in just three sessions. For the latest rates, check the live gold price on GoldRate.info.
Key takeaways
- Gold prices in India fell ₹9,500 per 10 grams over four sessions through Monday.
- Silver dropped ₹7,700 per kilogram in three sessions over the same period.
- Comments from Fed Chair Kevin Warsh fueled expectations of higher US interest rates.
- Higher rates increase the opportunity cost of holding gold, putting downward pressure on prices.
Common questions
Why do gold prices fall when interest rates rise?
Gold pays no interest or dividends, so when rates rise, investors tend to shift towards yield-bearing assets. A higher rate environment also often strengthens the US dollar, which makes dollar-denominated gold more expensive for holders of other currencies.
Are Indian gold prices directly linked to international rates?
Yes, domestic gold prices are largely driven by international spot prices, converted into rupees. Additional factors include import duties, local taxes, and the rupee-dollar exchange rate.
The recent sell-off underscores how sensitive precious metals are to shifts in monetary policy expectations. Traders will continue to watch for further signals from the Federal Reserve in the coming weeks.