In early trade, the price of silver on MCX fell by Rs 4,131 to Rs 2.40 lakh per kg. Whereas the price of gold fell by Rs 1145 to Rs 1.54 lakh per 10 grams.

Condition of gold and silver in international market

Gold and silver prices declined for the second consecutive session. Spot gold slipped 0.43% to $4,992 an ounce during Asian trading hours, while spot silver fell nearly 3% to $74.24 an ounce.

What is the main reason for the fall in prices?

There is a mixed effect of American economic data on gold and silver prices. Consumer inflation in the US was lower than expected in January, while employment growth was stronger than expected. These signals have balanced the market’s expectations regarding the Federal Reserve’s interest rates.

At present, market participants believe that the Fed will not make any changes in interest rates in its March 18 meeting. However, traders are pricing in the possibility of a rate cut by July and there is also a strong possibility of a rate cut in June. Expectations of interest rate cuts usually support gold, but policy uncertainty is currently creating pressure.

What signals are investors keeping an eye on?

Now investors are focused on the Fed meeting minutes, fourth quarter GDP data and the Fed’s favorite core PCE price index, which could indicate the direction of monetary policy going forward.

Geopolitical and global market impact

On the geopolitical front, market sentiment was also influenced by statements by an Iranian diplomat expressing his desire for a nuclear deal with the US that would yield economic benefits. Additionally, US markets were closed for Presidents Day, while many markets in China and Asia were closed for Lunar New Year holidays, limiting trading volumes and causing price volatility.