Gold Price Today: Gold Falls ₹4,133, Silver Drops ₹9,297 as Prices Correct in September

Gold and silver prices came under heavy pressure on Monday, September 28, as rising crude oil prices, higher US bond yields and expectations of further Federal Reserve rate hikes triggered a broad sell-off in precious metals.

According to figures attributed to the India Bullion and Jewellers Association (IBJA), 24-carat gold fell by ₹4,133 per 10 grams, bringing the rate to around ₹1.48 lakh. Silver also declined sharply, with the price of one kilogram falling by ₹9,297 to around ₹2.23 lakh.

The decline has been particularly notable because gold and silver had previously benefited from geopolitical uncertainty and safe-haven demand. However, the current market is being dominated by another force: concerns that higher oil prices could keep inflation elevated and delay monetary easing.

Gold was also under pressure in international markets. Reuters reported that spot gold fell as much as 3% on Monday to around $4,156 an ounce, its lowest level in more than seven weeks, as higher oil prices strengthened expectations of elevated US interest rates.

Gold Price Today: ₹4,133 Decline Brings Gold Near ₹1.48 Lakh

The latest fall has taken the domestic benchmark price of 24-carat gold back toward the ₹1.48 lakh level per 10 grams.

The figures reported for September 28 show:

A separate IBJA-based report puts the day's decline at ₹4,065 for gold and ₹9,158 for silver, highlighting that bullion rates can differ depending on the particular benchmark, timing and rate update used. The broader direction, however, is clear: both metals saw a sharp correction on September 28.

The IBJA publishes benchmark bullion rates, which are generally quoted before GST and jewellery making charges. Therefore, consumers buying physical jewellery should not expect the exact benchmark rate to be their final bill amount.

Gold and Silver Have Become Cheaper in September

The September decline becomes more significant when compared with the end of August.

According to the reported figures, 24-carat gold was around ₹1.56 lakh per 10 grams on August 31. By September 28, it had fallen to roughly ₹1.48 lakh, representing a decline of about ₹8,000 during the month.

Silver also weakened from around ₹2.37 lakh per kilogram at the end of August to approximately ₹2.23 lakh, translating into a decline of around ₹14,000.

This means the latest fall is not simply a one-day event. Precious metals have been undergoing a broader correction during September.

However, investors should distinguish between a short-term correction and a change in the long-term investment case for gold or silver.

Why Are Gold Prices Falling Today?

The biggest factor is the changing outlook for US interest rates.

The Federal Reserve raised its benchmark rate by 25 basis points earlier in September, taking the target range to 3.75%-4%. Market participants are now pricing in the possibility of another increase, with inflation remaining a major concern.

Gold does not generate interest income. Therefore, when government bond yields and interest rates rise, the opportunity cost of holding gold increases.

In simple terms, an investor may become more willing to hold an interest-bearing asset when yields are attractive rather than an asset that does not pay interest.

That relationship is not absolute, but it is an important short-term driver of bullion prices.

Crude Oil Is Creating a New Problem for Gold

The rise in crude oil prices has added another layer of pressure.

Brent crude moved sharply higher after uncertainty surrounding US-Iran negotiations and the Strait of Hormuz increased concerns about energy supplies. Reuters reported that the renewed oil strength was increasing inflation concerns and reinforcing expectations for further US rate hikes.

This creates an unusual situation for gold.

Geopolitical tensions normally support gold because investors often seek safe-haven assets during periods of uncertainty. But if the same geopolitical crisis pushes oil prices higher enough to increase inflation and bond yields, it can work against gold.

That is broadly what the market has been pricing in recently.

Strong Dollar and Higher Bond Yields Add Pressure

The US dollar and Treasury yields are also important.

A stronger dollar can make gold, which is internationally priced in dollars, more expensive for buyers using other currencies. Higher Treasury yields can simultaneously reduce the relative appeal of holding non-yielding bullion.

Reuters reported that both the dollar and US Treasury yields were firm as gold prices weakened on September 28.

This combination has created a difficult short-term environment for precious metals.

The key point is that gold is not falling because its traditional safe-haven role has disappeared. Rather, several macroeconomic forces are currently moving against it at the same time.

Silver Falls Even More Sharply

Silver has also experienced a significant correction.

The metal is influenced by investment demand, but unlike gold, silver has a substantial industrial component. It is widely used in areas such as electronics, solar technology and industrial applications.

That makes silver sensitive to both precious-metal sentiment and expectations for economic activity.

On September 28, international silver prices also declined, while domestic MCX silver futures came under substantial selling pressure. Business Standard reported that December silver futures were down around ₹8,500 per kilogram in afternoon trading.

Silver's higher volatility means percentage moves can be considerably larger than those seen in gold.

What Does the Fall Mean for Gold Investors?

For people who already own gold, a short-term decline does not automatically change the underlying purpose of the asset.

Gold is often held as part of a diversified portfolio, as a store of value and as a hedge against certain forms of financial and geopolitical risk.

But investors should also remember that gold can experience significant corrections even during periods of economic uncertainty.

The current episode demonstrates that clearly. Despite continuing geopolitical tensions, gold has weakened because interest-rate expectations, yields, the dollar and oil-driven inflation concerns have become more influential in the short term.

Physical gold investors also need to account for GST, making charges and the difference between buying and selling prices. These costs can make short-term trading in jewellery particularly inefficient.

What Could Happen Next?

The next direction of gold and silver will depend heavily on several variables.

1. Federal Reserve policy

Any indication that the Fed may keep rates higher for longer could continue to weigh on bullion. Conversely, evidence of cooling inflation or weakening economic activity could alter rate expectations.

2. US inflation and labour-market data

Investors will closely watch upcoming US economic releases because they can influence expectations for the Fed's next decisions.

3. Crude oil prices

Oil is increasingly important for gold because a sustained energy-price surge could keep inflation expectations elevated.

4. US-Iran developments

A reduction in geopolitical tensions could reduce the oil risk premium, while renewed disruption around the Strait of Hormuz could produce another sharp move in energy markets.

5. Dollar and Treasury yields

A weaker dollar and falling real yields could provide support to precious metals, while continued strength in both could keep pressure on prices.

Gold vs Silver: Why the Two Metals Behave Differently

Although gold and silver often move in the same direction, they are not identical investments.

Gold is more closely associated with monetary demand, central-bank purchases, safe-haven flows and investment demand.

Silver combines precious-metal characteristics with substantial industrial demand. This makes it potentially more sensitive to changes in manufacturing activity, technology demand and global economic expectations.

Consequently, silver can experience larger price swings than gold during both rallies and corrections.

Key Takeaway

Gold has fallen by roughly ₹8,000 per 10 grams during September, while silver has declined by around ₹14,000 per kilogram, according to the reported month-to-date comparison. On September 28 alone, gold and silver suffered another sharp decline, with reported falls of roughly ₹4,000 and ₹9,000 respectively.

The immediate pressure is coming from a combination of higher oil prices, elevated US bond yields, a firm dollar and stronger expectations of further Federal Reserve rate hikes.

For investors, the important question is not simply whether gold or silver has become cheaper. The next major moves will depend on inflation data, Fed policy, US yields, the dollar, crude oil and developments in the Middle East.

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This article is for informational and educational purposes only and should not be considered investment advice.