Strong Dollar Crushes Gold: 5.89% Weekly Decline in Precious Metals

This week’s precious metals rout—gold down 5.89%—stems from aggressive profit booking and an unyielding dollar rally. Geopolitical sparks ignited initial buying, but momentum fizzled fast.

Friday close: MCX Gold April up 0.23% at ₹1,44,825/10g; Silver May down sharply 1.72% (₹3,990) to ₹2,27,470/kg. IBJA’s 999 gold Friday price: ₹1,47,218/10g, slashed from Monday’s ₹1,56,436. 999 silver: ₹2,32,364/kg vs. ₹2,48,711—a hefty ₹16,347 loss.

Middle East unrest provided early lift via safe-haven flows, but Israel’s South Pars assault and Iran’s riposte inflated energy prices without bolstering metals long-term. Inflation risks loom larger.

Central bankers worldwide are unbowed: Fed, BoJ, BoC, BoE signal high-for-longer rates, sidelining gold and silver.

Technical maps show gold at lower supports ₹1,35,000-₹1,40,000 (resistance ₹1,50,000-₹1,52,000). Silver probes ₹2,15,000-₹2,20,000, with upside to ₹2,40,000 possible.

RBI data highlights interventions: Gold reserves +$664mn to $130.68bn (week ending Mar 13). Total forex – $7.05bn to $709.76bn, post prior -$11.68bn to $716.81bn. Dollar sales stabilized rupee amid oil surges and Iran strife. Foreign assets -$7.678bn to $555.568bn, hit by global currency volatility.

The stage is set for continued volatility, as markets weigh hawkish policy against brewing global tensions.