Gold and silver prices fell on the MCX on Tuesday as investors prepared for a widely expected US Federal Reserve interest rate hike. With markets pricing a 90% chance of a 25-basis-point increase, rising US Treasury yields are putting pressure on precious metals, which do not earn interest.
Gold and silver futures declined in early trade on Tuesday, tracking global sentiment as markets prepare for a significant monetary policy decision from the US Federal Reserve. Investors are adjusting their positions ahead of Wednesday’s announcement, which is widely expected to bring a 25-basis-point interest rate increase.
The primary pressure on precious metals stems from rising US Treasury yields, which have recently climbed above the 5% level. For investors, higher yields make government bonds more attractive compared to assets like gold and silver, which do not provide regular interest income. This shift in capital is keeping prices of bullion under pressure as investors move money toward higher-yielding assets.
On the Multi Commodity Exchange (MCX), the October gold contract opened at ₹1,51,115 per 10 grams, reflecting a decline of ₹115. Silver futures also faced a downward trend, with the December contract opening at ₹2,32,229 per kg, down by ₹461. International benchmarks mirrored this movement, with spot gold trading below the $4,300 per ounce mark on the Comex as traders digest the implications of a tightening US economic environment.
Adding to the uncertainty, global crude oil prices have remained elevated due to ongoing geopolitical tensions in the Middle East. While higher oil prices typically act as an inflationary signal—which can sometimes support gold as a safe-haven hedge—the current environment of rising interest rates is currently outweighing this factor. Market participants are concerned that if the US central bank adopts an unexpectedly aggressive or 'hawkish' stance, it could trigger further selling of gold and silver.
The market mood remains fragile as traders wait for the Fed’s official policy statement on September 16, 2026. The key monitorable for investors in the coming days will be the central bank's commentary regarding future rate moves. If the Federal Reserve signals that interest rates may need to stay higher for a longer period to control inflation, it could continue to limit the recovery potential for precious metals in the near term.