Bullion futures decline as oil rise, Fed cues weigh

Precious metals retreat amid energy-driven price pressures, traders eye policy signals and global demand trends Gold and silver prices declined on Wednesday across domestic and global exchanges as rising crude oil prices heightened inflation concerns and reinforced expectations of tighter monetary conditions. 

Investors remained cautious ahead of the US Federal Reserve’s policy decision, which is expected to offer clarity on the future trajectory of interest rates amid persistent price pressures.

On the Multi Commodity Exchange of India, the most active June gold contract fell 0.7% to ₹149,029 per 10 grams, while the July silver contract declined 0.9% to ₹240,508 per kg.  

Globally, on COMEX, gold for June delivery slipped 0.6% to $4,581.5 per ounce, and silver eased 0.8% to $73.15 per ounce. Analysts attributed the weakness to a surge in crude oil prices, which has amplified inflation worries and strengthened expectations that the Federal Reserve will maintain a hawkish stance. Higher interest rates tend to reduce the appeal of non-yielding assets such as bullion, as investors shift towards yield-bearing instruments. .

Market participants are closely tracking the outcome of the Fed’s policy meeting later in the day, which could also mark the final meeting chaired by Jerome Powell before a potential leadership transition. Geopolitical tensions in West Asia also remained unresolved, limiting the downside in bullion prices. 

Central bank purchases remained supportive, adding to overall demand momentum. Despite near-term pressure from elevated yields and a firm dollar, analysts note that sustained geopolitical risks and resilient investment demand may continue to provide underlying support to bullion markets.