Gold and silver prices moved unevenly on Thursday, reflecting a market that appears cautious rather than reactive. Early trade suggested a soft undertone, with both metals slipping on domestic exchanges even as international prices showed signs of recovery.

On the Multi Commodity Exchange, gold futures for April delivery dropped notably, while silver also saw a sharp decline. The pullback followed the US Federal Reserve’s decision to hold interest rates steady, a move that has kept investors from taking aggressive positions in bullion.

By mid-session, gold contracts had fallen by more than Rs 3,600 to around Rs 1.49 lakh per 10 grams. Silver futures were also under pressure, losing nearly Rs 4,000 per kilogram. Market participants attributed the weakness largely to a firm US dollar and rising Treasury yields, both of which tend to reduce the appeal of non-yielding assets like gold.

Market Direction Hinges On Interest Rate Signals

There is a sense among traders that gold is no longer reacting purely to geopolitical tension. While global uncertainty, including developments in West Asia, has historically supported safe-haven demand, the current environment is being shaped more by monetary policy expectations.

The Federal Reserve’s stance has been particularly influential. By maintaining interest rates in the 3.5 percent to 3.75 percent range and signalling caution on future cuts, the central bank has effectively capped any strong upside in bullion.

At the same time, inflation concerns remain unresolved. Higher crude oil prices have added another layer of complexity, raising doubts about how quickly central banks can ease policy. That uncertainty has kept gold trading within a narrow band rather than trending decisively.

Internationally, prices showed some resilience. Spot gold edged higher after earlier declines, recovering slightly as the dollar paused its rally. Silver also moved up in global markets, though gains were limited and lacked conviction.

Analysts noted that gold had recently slipped below key levels, falling under the $5,000 mark before stabilising. The metal had previously reached record highs earlier this year, but momentum has since faded as macroeconomic signals shifted.

There is also a broader recalibration underway. Earlier expectations of rate cuts had supported a strong rally in gold, but that narrative has weakened. Revised economic data and persistent inflation have pushed those expectations further out, reducing near-term bullish sentiment.

Back home, physical demand has remained subdued, which has added to the pressure on prices. Exchange-traded funds linked to gold and silver have also recorded declines, mirroring the broader market hesitation.

Still, few in the market are calling this a reversal. The longer-term outlook remains intact, according to most analysts, who see the current phase more as a correction within a larger upward trend.

For now, the metals market appears to be waiting rather than moving, with the next clear direction likely tied to how inflation data and central bank signals evolve in the coming weeks.