Precious Metals Plunge: Gold and Silver Crash to Seven-Month Lows Amid Intensifying Rate Hike Fears

Precious Metals Plunge: Gold and Silver Crash to Seven-Month Lows Amid Intensifying Rate Hike Fears​

Gold and silver prices are experiencing a sharp sell-off, with both precious metals falling to their lowest levels in the past seven months. The decline began after market speculation grew regarding the US Federal Reserve's willingness to cut interest rates soon. Concerns over rising inflation, exacerbated by geopolitical tensions including the Iran war, have fueled expectations that global interest rates may remain high or even rise further.

Silver Faces Multi-Month Slump Under Industrial Pressure​

Silver has witnessed particularly heavy selling pressure in recent trading sessions, pushing prices down to multi-month lows. Spot silver was down more than 2 percent at $56.35 an ounce on Thursday. In the previous session, it fell by 9.1 percent to $56.41, marking a low point since November 2025 before recovering slightly to close at $57.71.

Silver is especially sensitive to shifts in investor risk appetite due to its dual status as both a precious and industrial metal. Currently, the price stands at less than half of the record high it once achieved, which was $121 an ounce back in January.

Gold Slides Below Key Resistance Level in Seven Months​

Spot gold has also extended its losses, slipping below the critical $4,000-an-ounce mark for the first time in seven months during a previous trading session. The downward trend reflects increasing uncertainty surrounding safe haven assets as investors look towards other riskier investments.

For MCX Gold, immediate support is identified at Rs 1,39,000, with resistance being targeted around Rs 1,50,000. This technical view suggests that the corrective phase remains ongoing for precious metals.

Technical Analysis Confirms Sustained Downside Trend​

Nirpendra Yadav, Senior Commodity Research Analyst at Bonanza, noted that COMEX gold futures settled under pressure last week, trading below the 50-week Simple Moving Average (SMA). The weekly chart continues to demonstrate a pattern of lower highs and lower lows, indicating sustained downward pressure. Indicators like the weekly RSI slipping below 40 and the MACD remaining beneath its signal line confirm this bearish momentum.

On silver, COMEX prices have weakened after breaching key near-term support levels, continuing to register lower highs on the weekly chart. Although momentum indicators are subdued, showing signs of stabilization, trading volumes have eased, reflecting persistent selling interest. For MCX Silver, immediate support is set at Rs 2,00,000, with resistance targeted around Rs 2,31,000.

Fundamental Drivers Behind Precious Metal Decline​

The simultaneous fall in both gold and silver is attributed to several shifts in global economic sentiment. A strengthening US dollar has made the metals more expensive for holders of other currencies, thus reducing global demand and negatively impacting prices.

Easing geopolitical tensions and an improved risk sentiment have consequently lowered the safe-haven demand that precious metals typically benefit from. Investors have significantly shifted funds out of gold and silver and into equities and other riskier assets. This shift is underscored by the increased expectation that interest rates may remain higher for longer, putting immense pressure on non-yielding assets like gold and silver. Higher prevailing interest rates naturally improve the attractiveness of income-bearing assets compared to these metals.