Gold Price Today June 18: MCX Gold Falls Rs 1,600, Silver Drops 2.5% at Open on Fed Rate Hike Signal

Gold and silver futures fell sharply at the opening of trade on the Multi Commodity Exchange on Thursday after the US Federal Reserve indicated the possibility of a rate hike later this year while keeping benchmark interest rates unchanged.

As of 12:01 PM IST on June 18, MCX silver futures (July 2026 delivery) were down ₹6,298 or 2.5% at ₹2,45,509 per kilogram. MCX gold futures (August 2026 delivery) had dropped ₹1,600 to ₹1,52,304 per 10 grams. Both metals had ended the previous session largely unchanged.

In overseas markets, spot gold advanced 1.4% to $4,316.42 per ounce after falling 1.7% in the previous session. US gold futures (August delivery) were down 1% at $4,336.70. Spot silver gained 1.8% to $69.18 per ounce. Spot platinum rose 1.2% to $1,757.53 per ounce and palladium gained 1.3% to $1,329.99 per ounce.

Why Are Gold And Silver Prices Falling Today

The sell-off followed Wednesday's Federal Open Market Committee decision, the first under new Fed Chairman Kevin Warsh.

The Fed held its benchmark rate unchanged at 3.50% to 3.75%. However, nine of the 18 voting members on the committee indicated that a rate hike would be warranted before the end of 2026. That is a significant shift from March, when no member had projected a hike and the committee's median forecast pointed to one rate cut for the year. The median projection now places the federal funds rate at 3.8% by year-end, up from 3.4% in the March dot plot.

The Fed's policy statement described inflation as "elevated," citing energy "supply shocks" as a contributing factor. US consumer inflation stood at 4.2% year-on-year in May, the highest in three years.

At the official FOMC press conference in Washington on 17 June, Warsh addressed the inflation question directly. "The commitment to deliver is strong, unanimous, and unambiguous," he said. "That is an important message we have missed for five years. And we are going to fix that." Warsh declined to submit a personal rate forecast in the dot plot, citing concerns about forward guidance limiting the central bank's flexibility.

Higher interest rates make yield-bearing assets more attractive relative to non-yielding metals such as gold and silver. The US dollar index rose nearly 1% following the Fed decision, adding further pressure on rupee-denominated MCX prices.

Domestic Gold And Silver Rates On 18 June

Physical gold and silver retail prices in major cities as of the morning of 18 June, sourced from local bullion market data:

Mumbai: 24K gold - ₹15,109 per gram | 22K gold - ₹13,849 per gram

Delhi: 24K gold - ₹15,124 per gram | 22K gold - ₹13,864 per gram

Chennai: 24K gold - ₹15,305 per gram | 22K gold - ₹14,029 per gram

Kolkata: 24K gold - ₹15,109 per gram | 22K gold - ₹13,849 per gram

Silver is trading at approximately ₹2,64,900 per kilogram in the domestic physical market. Retail prices vary across cities due to local levies and jewellers' margins.

Global Spot Prices And The Iran Ceasefire

International spot gold climbed 1.4% to $4,316.42 per ounce on Thursday, recovering from a 1.7% drop in the previous session. The recovery came after President Donald Trump signed an interim agreement to end hostilities with Iran and reopen the Strait of Hormuz.

The Strait of Hormuz handles approximately one-fifth of global oil and liquefied natural gas trade. The agreement, described as a memorandum of understanding, includes a ceasefire on all fronts and a framework for nuclear negotiations within a 60-day window. A formal signing is scheduled in Switzerland.

Lower crude oil prices that followed the deal eased concerns about an energy-driven inflation spiral, which had been the primary headwind for gold since the conflict began in late February. However, this has not been sufficient to offset the dollar strength and rate-hike expectations that the Fed's Wednesday decision put firmly back on the table.

Also Read- RBI Infuses ₹72,300 Crore Into Banking System Via VRR Auctions As Liquidity Surplus Narrows

Key Factors Weighing On Gold And Silver Prices

Fed dot plot shift: Nine of 18 FOMC members now project a rate hike by year-end, against zero in March. The median rate forecast for 2026 has moved up by 40 basis points.

US dollar: The dollar index rose nearly 1% after the Fed decision. Gold is imported and priced in dollars, so a stronger dollar raises domestic costs directly.

US inflation: CPI at 4.2% year-on-year in May is its highest since 2023. Until inflation shows a sustained decline, rate-hike expectations are unlikely to recede.

Crude oil and Hormuz: The anticipated reopening of the Strait of Hormuz has pushed crude prices lower, which reduces inflationary pressure over the medium term. This is a partial offset for gold but has not reversed the near-term trend.

Domestic physical demand: Retail buying ahead of the festive and wedding season is providing some support to physical prices, limiting sharper corrections in the local market.

Sources:

NSE

BSE