Why are gold prices crashing today? MCX Gold down Rs 3,200/10 grams, plunges over 2% - top reasons for fall

Gold price crash today: The start of the week saw both the precious metals, MCX Gold and MCX Silver, crash on Monday as the rise in oil prices fuelled inflation worries and increased expectations that the US Federal Reserve could raise interest rates further.On the domestic bourse, MCX silver futures for September 2026 delivery fell Rs 6,661 to Rs 2,28,035 per kg. Gold futures for October 2026 delivery declined Rs 3,214 to Rs 1,47,667 per 10 grams.In international markets, spot gold was down 1.5% at $4,223.95 per ounce as of 0117 GMT, while US gold futures declined 1.5% to $4,257.90.Other precious metals also traded lower. Spot silver fell 2.6% to $62.64 per ounce, platinum declined 2.1% to $1,741.45 and palladium dropped 2.1% to $1,239.95.Why is gold crashing today?Gold remains under pressure as both bond yields and crude oil prices moved higher. The increase in oil prices, driven by mixed indications on supply flows, kept inflation risks firmly in focus among investors.Iran said diplomacy remained the only route to resolving its conflict with the United States and Israel. This came after US President Donald Trump said he had rejected an Iranian proposal to reopen the Strait of Hormuz and bring the fighting to an end. Oil prices later recovered more than 1%.According to experts, the primary reason for prices falling sharply is the rise in US bond yields.Ashish Rajodiya, Head – Commodities, PL Capital says, “MCX Gold (December contract) is trading at Rs 1,50,500 per 10 grams, down Rs 2,700 or 1.80% today, extending its slide for a second straight week. The pressure is coming from a sharp US Treasury bond selloff - the 10-year yield at 5.13%, its highest since 2007, and the 30-year at 5.44%, its highest since 2004.”CME FedWatch data indicates that markets are now pricing a 68.1% probability of another 25 basis points rate hike by the US Federal Reserve in its October-end meeting. Earlier, the odds were just 31.9%.“Elevated crude prices, rather than boosting gold's safe-haven appeal as they typically would during geopolitical stress, are instead reinforcing the case for further Fed tightening, feeding a stronger dollar and steeper yield curve that both work against non-yielding bullion,” he says.Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities explains, “Global commodities are trading under pressure, with precious metals under sharp pressure as crude remains firm. Uncertainty around the US-Iran conflict continues to keep risk sentiment volatile. Recent diplomatic efforts have produced mixed signals, with Iran indicating readiness for both negotiations and renewed conflict, while the US has rejected Iran’s latest proposal, although further talks through mediators remain possible.”“Gold is trading at $4185, down more than 2.%, and it is facing sharp selling pressure as geopolitical uncertainty, a firm Dollar and higher bond yields with 5.22% on 10yrs weigh on bullion as higher probability of rate hike prices in. The lack of clarity over a potential US-Iran settlement is keeping safe-haven demand volatile,” he adds.What’s the outlook?Ashish Rajodiya is of the view that gold prices have support at Rs 1,48,000 and Rs 1,46,000, with resistance at Rs 1,52,500 and Rs 1,55,000.“The metal's next move likely hinges on two threads converging at once: the Fed's October rate decision, and whether the recent signs of renewed US-Iran diplomatic engagement on Hormuz firm up into an actual de-escalation,” he says.“A dovish surprise from the Fed or confirmed progress on Iran talks could spark a sharp bounce toward resistance, while continued hawkish signals or a stalled Iran negotiation would likely extend the slide toward the lower support band,” he adds.Praveen Singh, Head of Commodities at Mirae Asset Sharekhan notes that following a weekly loss of 2% in the week ending September 25, spot gold has extended its decline as the US and Iran remain far apart in their stands in the conflict. “This week is crucial as various job reports including September nonfarm payroll will be released. Gold is vulnerable after falling through crucial support zone of $4185-4200. Bears eye a test of psychological support at $4000. Resistance is at 4250/4300,” he says.How should you trade gold?Manoj Kumar Jain of Prithvi Finmart expects gold and silver to see continued volatility this week as traders track movements in crude oil prices and the dollar index, along with geopolitical tensions and developments in the US-Iran peace talks.For gold, he sees support at $4,284-4,260 per troy ounce, with resistance placed at $4,355-4,388. In silver, support is at $63.80-63.00 per troy ounce, while resistance stands at $65.50-66.60.On the MCX, Jain has identified support for gold at Rs 1,50,150-1,49,600 and resistance at Rs 1,51,400-1,52,000. For silver, his support levels are Rs 2,33,000-2,30,400, with resistance at Rs 2,36,600-2,38,800.Jain told ET that investors should wait for further developments in the US-Iran peace talks before initiating fresh positions in gold and silver. For those already holding long positions, he recommended keeping a strict stop-loss below Rs 1,49,600 for gold and below Rs 2,30,000 for silver, based on daily closing levels.(Disclaimer: Recommendations and views on the stock market, or any other asset classes or personal finance management tips given by experts and analysts are their own. These opinions do not represent the views of The Times of India.)You use AI every day. Now get your AI Quotient. Take the AIQ test.