Gold prices witnessed significant selling pressure on Friday, June 19, with the yellow metal opening lower on the Multi Commodity Exchange (MCX) as investors assessed the impact of the US Federal Reserve’s hawkish policy outlook and easing geopolitical risks.
The decline in precious metals comes amid rising expectations of tighter monetary policy in the United States and improving sentiment following the easing of tensions in the Middle East.
Gold And Silver Prices On MCX Today
At 9:02 AM, the MCX Gold July futures contract was trading at ₹1,45,450 per 10 grams, down ₹1,974 or 1.34 per cent from the previous close.
Silver prices also came under pressure. The MCX Silver July futures contract fell ₹5,871, or 2.47 per cent, to ₹2,31,701 per kilogram.
The sharp decline reflects broader weakness in global precious metal markets as investors reassess the outlook for interest rates and safe-haven demand.
Gold Slips In International Markets
In the international market, gold traded below $4,200 per ounce during early Friday trade after losing 1.1 per cent in the previous session.
According to Bloomberg data, bullion is on track to register its third consecutive weekly decline as investors move away from safe-haven assets.
The recent weakness in gold prices has been driven by a combination of factors, including expectations of higher US interest rates and reduced geopolitical concerns following diplomatic developments involving the United States and Iran.
Federal Reserve’s Hawkish Tone Weighs On Bullion
A major factor behind the decline is the US Federal Reserve’s policy outlook.
Federal Reserve Chairman Kevin Warsh’s comments following the central bank’s latest policy meeting strengthened market expectations that interest rates could rise further this year.
Higher interest rates typically reduce the appeal of non-yielding assets such as gold because investors can earn better returns from interest-bearing instruments.
As a result, traders have trimmed positions in precious metals, putting downward pressure on prices.
Easing Middle East Tensions Reduce Safe-Haven Demand
Gold’s safe-haven appeal also weakened after the United States announced an end to its blockade linked to the Strait of Hormuz.
Commercial shipping activity has resumed through the critical maritime route, easing concerns about disruptions to global energy supplies.
The signing of a peace agreement between the United States and Iran further improved investor sentiment, reducing the urgency to seek refuge in traditional safe-haven assets like gold.
Factors Limiting Further Decline
Despite the recent correction, analysts believe several structural factors continue to support gold prices.
According to Kotak Securities, weaker investor participation and exchange-traded fund (ETF) outflows are currently acting as headwinds for the metal.
However, steady physical demand from China, continued purchases by global central banks, ongoing geopolitical uncertainties and the broader trend of de-dollarisation are helping prevent a sharper fall in prices.
These supportive factors are expected to provide a cushion to gold even as markets continue to monitor developments in US monetary policy and global economic conditions.
Outlook For Gold
Market participants will closely track upcoming economic data releases and signals from the Federal Reserve regarding future rate decisions.
Any indication of prolonged monetary tightening could keep pressure on bullion prices in the near term. Conversely, renewed geopolitical concerns or signs of economic weakness could revive demand for gold as a safe-haven investment.
For now, traders remain cautious as gold navigates the competing forces of higher interest-rate expectations and long-term structural demand.