Gold and silver prices showed mixed movements in domestic futures trade on Monday (May 11), with gold prices declining by close to ₹22 per gram to ₹15,213 per gram for 24-karat gold, while 22-karat gold fell by ₹20 per gram to ₹13,945 per gram and 18-karat gold dropped ₹16 per gram to ₹11,410 per gram. According to Trading Economics, international gold rate stood at $4,730 per ounce on Monday, remaining close to its three-week high mark. The decline marked the third fall in the last five trading sessions, with the weakness coming despite a rally in international gold markets. Silver prices in India remained largely stable, priced at ₹275 per gram and ₹2,75,000 per kilogram. In contrast, MCX gold June futures ended Monday's session with 0.06% gains at ₹1,53,750 per 10 gram, while MCX silver July futures closed marginally lower with 0.01% loss at ₹2,78,274 per kilogram.
The decline in domestic gold prices came after Prime Minister Narendra Modi urged citizens to avoid gold purchases amid concerns arising from the ongoing United States-Israel-Iran conflict and delays in negotiations. As reported by Trading Economics, this advisory has contributed to the recent volatility in gold prices, with sentiment influenced by developments around Iran-US negotiations, concerns over potential disruptions in the Strait of Hormuz, rising crude oil prices, and weakness in the US dollar. The advisory represents a significant shift in government stance on precious metals, particularly given the current geopolitical tensions and their potential impact on market stability.
While gold prices declined, silver is emerging as a preferred investment asset for Indian investors amid the ongoing shift in precious metals preferences. According to SMEStreet, silver benefits during such periods because it acts as both a precious metal and an industrial commodity, unlike gold which primarily serves as a wealth preservation asset. The silver market has been facing multiple consecutive years of structural deficits, where demand exceeds supply, creating increased investor attention. Industrial silver demand has reached record highs, crossing nearly 680 million ounces in annual usage, driven by growing use in photovoltaics, electronics, EVs, AI infrastructure, and semiconductors. India's semiconductor mission and manufacturing ambitions are creating a powerful long-term case for silver demand, as silver plays a critical role in semiconductor and electronics manufacturing due to its unmatched electrical conductivity.
International gold rates showed strength, with international gold rate on Monday edging higher and remaining close to its three-week high mark at $4,730 per ounce, according to Trading Economics. The surge in international gold prices came as investors remained hopeful of positive development related to US-Iran negotiations. However, any further surge in brent crude or any fresh correction can impact gold price today, as noted by Trading Economics. Market analysts explain that there are currently conflicting demands for gold as a safe haven because of central bank purchases, rising oil prices, fiscal instability, and geopolitical concerns. As per Ruchit Thakur, Market Analyst at VT Markets, a strong US dollar, high real rates, and declining prospects of a short-term Fed decrease are examples of macroeconomic problems creating this tug-of-war in gold's trajectory. Global brokerages now reduced expectations for U.S. interest rate cuts, with forecasts split between limited easing and no cuts in 2026, after earlier markets expected two rate cuts this year.
According to a house view from Tata Asset Management, gold is expected to remain volatile in the near term, with prices likely to consolidate amid mixed macroeconomic signals. As reported by CNBC TV18, the fund house expects short-term fluctuations of around ±5%, while noting that geopolitical developments—particularly tensions involving the US and Iran—could keep prices volatile in the near term. However, it maintains a constructive long-term outlook, citing central bank buying, high global debt levels, and gradual diversification away from the US dollar as key structural supports. For Indian investors, rupee depreciation is also expected to cushion downside risks in domestic prices, though the current advisory from PM Modi adds another layer of complexity to the investment landscape.
