MCX Gold Falls 1.21% to ₹1.45L as Dollar Surges to 1-Year High on Fed Rate Bets

The Quick Take

• MCX gold August futures fell 1.21% to ₹1,44,759 per 10 grams as the US dollar index hit a 1-year high
• MCX silver July futures declined 0.71% to ₹2,24,227 per kg alongside the gold correction
• Experts are flagging key technical support and resistance levels as gold extends its downtrend

Gold prices on India's Multi Commodity Exchange fell sharply after the US dollar index climbed to its highest level in over a year, exceeding 101 and squeezing rupee-denominated precious metal prices from two directions. MCX gold August futures dropped 1.21% to ₹1,44,759 per 10 grams, while MCX silver futures fell 0.71% to ₹2,24,227 per kg. The sell-off reflects the classic inverse relationship between gold and the dollar, amplified by growing expectations of US Federal Reserve interest rate increases in the near term, which lift the opportunity cost of holding non-yielding gold.

The MCX decline creates a notable divergence between Indian retail gold demand and financial market pricing. Indian households traditionally buy gold during price dips, which can create short-term support at key technical levels. However, if dollar strength persists — driven by Fed rate hike bets — the headwind to gold prices in rupee terms is likely to continue. Indian jewellers who source physical gold will benefit from lower procurement costs, while gold ETFs and sovereign gold bonds face net asset value pressure in the near term.

The key forward signal for Indian gold investors is the US Fed policy trajectory. If the Fed confirms rate hikes in July and September, the dollar index may push higher, extending gold's correction toward new multi-week lows. Conversely, any softening in US inflation data could quickly reverse dollar strength and bring relief to MCX prices. Traders should watch the dollar index around the 101.50-102.00 resistance zone as the next technical trigger for the next leg of this move.

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