Gold and Silver Prices Tumble as US Dollar Strengthens and Fed Stance Tightens

Precious metal markets, including gold and silver, have recorded sharp declines throughout June 2026. Spot silver has plummeted by over 14% this week alone, reaching a seven-month low near $56.35 per ounce, which represents a massive correction of over 50% from the all-time high of $121.78 per ounce observed in January 2026. Similarly, MCX silver futures in India have fallen significantly, recently trading around ₹2,10,308 per kilogram, with market analysts monitoring support levels near the ₹2,00,000 mark.

The primary catalysts for this volatility include a stronger US Dollar Index (DXY), which has surged above the 101.5 level, and an increasingly hawkish stance from the US Federal Reserve. Under Chairman Kevin Warsh, the central bank has signaled potential further interest rate hikes, with market sentiment now factoring in a roughly 67% probability of an increase by September 2026. The shift away from non-yielding assets, combined with the easing of geopolitical tensions following the US-Iran ceasefire agreement, has substantially reduced the safe-haven demand that previously fueled bullion prices.

The broader selloff has extended to commodity-exposed equities, with Hindustan Zinc shares falling 14% in June due to silver price fluctuations. Additionally, gold loan NBFCs like Muthoot Finance and Manappuram Finance have seen stock declines of up to 3.5%, reflecting investor concerns regarding potential impacts on loan-to-value ratios and non-performing asset levels. While the current correction is steep, market watchers remain focused on whether further speculative unwinding will persist as investors reallocate capital following the recent tech-led equity market volatility.