Gold and silver prices extended their decline on June 23, with both precious metals retreating further from the record highs seen earlier this year.
The fall came amid easing tensions between the United States and Iran and a more hawkish stance from the US Federal Reserve, reducing demand for safe-haven assets.
Gold Prices Slide
On the MCX, the August gold contract fell by ₹1,161 to around ₹1,46,957 per 10 grams, compared with its previous close of ₹1,48,118.
The contract remains well below its 2026 high of ₹1,80,779.
On COMEX, gold prices declined by $44.80 to around $4,157.90 an ounce, retreating from record levels above $5,580.
Silver Sees Sharper Correction
Silver recorded steeper losses.
The July silver contract on the MCX dropped ₹6,469 to ₹2,27,841 per kg, down from the previous close of ₹2,34,310.
The metal had touched a high of nearly ₹4,20,048 per kg earlier this year.
On COMEX, silver fell $2.48 to around $63.10 an ounce, compared with its 2026 peak above $121.
Why Precious Metals Are Falling
Two factors are driving the correction.
Easing US-Iran Tensions
Progress toward a possible agreement between the United States and Iran has eased concerns surrounding the Strait of Hormuz, one of the world’s most important oil shipping routes.
Reports suggest:
- The US has granted Iran a temporary licence to resume oil exports.
- Shipping activity through the Strait of Hormuz has improved.
- Regional producers have found alternative routes for crude supplies.
Lower geopolitical risks have reduced the appeal of gold and silver as safe-haven assets.
Hawkish Federal Reserve
At its June meeting, the Federal Reserve kept interest rates unchanged but adopted a more hawkish tone.
According to projections:
- Nine of the 19 policymakers expect at least one rate increase this year.
- Markets are increasingly pricing in a September rate hike.
- The US Dollar Index has climbed above 101.
Higher interest rates increase the opportunity cost of holding non-yielding assets such as gold and silver, while a stronger dollar makes bullion more expensive for overseas buyers.
Banks Lower Forecasts
The recent correction has prompted several institutions to revise their price expectations.
Deutsche Bank
- Reduced its third-quarter gold target to $4,300 an ounce.
- Cut forecasts by as much as 22%.
Goldman Sachs
- Lowered its year-end target by $500.
- Now expects gold to end the year around $4,900 an ounce.
Some Analysts Remain Bullish
Not all institutions have turned cautious.
J.P. Morgan has maintained a year-end 2026 average gold price forecast of around $6,000 an ounce.
The bank believes:
- Central bank purchases continue to support prices.
- Chinese gold imports rose sharply in the first quarter.
- Structural demand remains intact.
Silver’s Industrial Demand Remains Strong
Unlike gold, silver also benefits from industrial consumption.
According to analysts, the market has remained in a structural supply deficit for five consecutive years.
Demand continues to come from sectors such as:
- Solar panel manufacturing.
- Electronics.
- Industrial applications.
This means silver’s price drivers extend beyond safe-haven demand and interest rate expectations.
Key Factors to Watch
Investors are closely monitoring:
- Progress in US-Iran negotiations.
- Developments surrounding the Strait of Hormuz.
- The Federal Reserve’s actual rate decisions.
- The path of the US dollar.
These factors are expected to influence the direction of gold and silver prices in the coming months.
TL;DR
Gold and silver prices declined on MCX and COMEX as easing US-Iran tensions and expectations of higher US interest rates reduced safe-haven demand. While some banks have lowered price targets, others remain optimistic about longer-term prospects, particularly for silver due to strong industrial demand.
AI Summary
- Gold and silver extended losses on June 23.
- Easing Middle East tensions weakened safe-haven demand.
- A hawkish Federal Reserve and stronger dollar pressured prices.
- Deutsche Bank and Goldman Sachs lowered gold forecasts.
- J.P. Morgan remains bullish, while silver continues to benefit from industrial demand.
