Gold and Silver Prices Drop Amid Rising Oil Costs and Inflation Concerns

Oct 21, 2026 - 10:00

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Gold and Silver Prices Drop Amid Rising Oil Costs and Inflation Concerns

On October 21, 2023, both gold and silver prices declined in trading, pressured by increasing crude oil prices that have reignited worries about inflation and the possibility of further interest rate hikes. Heightened geopolitical tensions in West Asia and recent assaults on oil tankers have exacerbated fears of disruptions to global oil supplies, contributing to the market unease.

In the international arena, Comex gold futures hovered near $4,140 per ounce, while silver futures traded close to $57.60 per ounce. Domestically, on the Multi Commodity Exchange (MCX), gold futures were around ₹1,46,100 per 10 grams, with silver futures near ₹2,09,750 per kilogram at the time of reporting.

Gold Prices Experience Decline

Gold futures opened the day lower, with the December contract on MCX starting at ₹1,46,328 per 10 grams, down ₹191 from the previous close of ₹1,46,519. As trading progressed, the contract slipped further, falling ₹389 to ₹1,46,130. Earlier this year, gold had reached a peak of ₹1,80,779 per 10 grams, indicating the recent drop reflects a significant pullback from those highs.

Silver Also Sees a Downturn

Silver futures followed a similar pattern, opening at ₹2,10,400 per kilogram for the December contract on MCX, a decrease of ₹1,085 from the previous close of ₹2,11,485. The price fell further during the session, declining by ₹1,733 to ₹2,09,752. Notably, silver had surged to a high of ₹4,20,048 per kilogram earlier in the year, illustrating the extent of the current correction.

Global Market Trends

Internationally, gold futures on Comex opened at $4,143.40 per ounce, slightly above the previous close of $4,142.60. However, prices slipped by $3.20 during trading to $4,139.40 per ounce. Earlier in the year, gold futures reached $5,586.20 per ounce, a level that remains distant amid the current market climate.

Silver futures on Comex opened at $58.15 per ounce but edged down by $0.43 to $57.57 per ounce as trading continued. Silver had previously hit a high of $121.79 per ounce this year, highlighting the considerable volatility seen in precious metals markets.

Market Analysis and Price Levels

Ajay Kedia, director of Kedia Advisory, provided insights into the current market dynamics. He noted that gold was under fresh selling pressure, with open interest increasing by 0.42 percent to 16,829 contracts as prices fell by ₹747. According to Kedia, gold’s immediate support levels lie at ₹1,45,750 and ₹1,44,980, while resistance is expected near ₹1,47,320. Should prices surpass this resistance, they could move towards ₹1,48,120.

Regarding silver, Kedia observed signs of short covering with open interest dropping 1.45 percent to 19,522 contracts as prices gained ₹1,657. He identified initial support at ₹2,08,570 and ₹2,05,650, with resistance at ₹2,13,920. A sustained move above this resistance could push silver prices towards ₹2,16,360.

Context and Implications

The decline in precious metals prices amid rising crude oil costs reflects broader economic concerns. Elevated oil prices often lead to increased inflationary pressures, prompting central banks to consider tightening monetary policy through interest rate hikes. This environment tends to reduce the appeal of non-yielding assets like gold and silver, as higher rates increase the opportunity cost of holding these metals.

Geopolitical events in West Asia, including attacks on oil tankers, have heightened uncertainty around energy supplies. This factor contributes to volatility in commodity markets, influencing investor sentiment and trading positions.

Investors and traders will continue to monitor these developments closely, assessing how inflation trends and global tensions may impact precious metals and energy markets in the coming weeks.

Note on Pricing Units