Gold and Silver Prices Fall Sharply as Rising Oil and Bond Yields Hit Markets

Silver prices dropped by ₹6,800 per kg on Friday to reach ₹1,92,800, hitting their lowest level since December 2025. MCX gold prices also declined slightly by 0.29 percent, staying near a three-month low of around ₹1.40 lakh per 10 grams. Both precious metals have faced heavy selling pressure through October, putting them on track for their second straight monthly decline. Rising bond yields and high crude oil prices have created major challenges for bullion.

Market Factors

Crude oil prices rose as Brent crude climbed toward $115 per barrel on Friday. Attacks on Saudi targets by Houthi groups and worries over possible US strikes on Iran have pushed oil supplies into uncertainty. Higher energy costs pushed recent US consumer and producer inflation data higher than expected. This has strengthened expectations that the US Federal Reserve might tighten monetary policy further. While higher interest rates normally make non-yielding assets like gold less attractive, market expectations point toward the Fed holding rates steady at its upcoming October 27–28 meeting. Meanwhile, CME's FedWatch Tool shows an 81 percent chance of a rate hike in December. Analysts note that COMEX gold also corrected toward $4,000 amid growing rate expectations.

Price Drops

Silver is down 7.5 percent based on Friday's low and faces a fifth straight weekly loss. The metal has plunged ₹56,000 from its August peak of ₹2,48,800 per kg, and sits more than halfway down from its record high of ₹4,20,048 per kg following a 170 percent surge in 2025. Gold has fallen ₹23,000 per 10 grams from its August peak of ₹1,64,773. Jateen Trivedi, vice president and research analyst at LKP Securities, stated that gold declined more than 3.5 percent over the week to around ₹1,42,800. He added that higher rate expectations and rising bond yields continue to weigh on bullion by increasing the opportunity cost of holding non-yielding assets.

Context

Precious metals like gold and silver often move in opposite directions to interest rates, bond yields, and major energy prices. When inflation rises and central banks consider higher interest rates, investors shift their money toward assets that pay regular returns. This dynamic explains why climbing oil prices and stronger inflation numbers weigh heavily on gold and silver markets.