RBI raised its key repo rate by 25 basis points on Wednesday, sending December gold futures on the MCX down 2% to ₹1.5 lakh per 10 grams and silver to ₹2.25 lakh per kg.
Across international markets, Comex gold fell $158.9 per ounce to $4,162.3, while silver slid $4.38 to $60.41, reflecting a sharper decline than the Indian benchmark.
Jateen Trivedi of LKP Securities said the stronger U.S. dollar and rising Treasury yields were the main headwinds, forcing profit‑booking in bullion.
Pranav Mer of JM Financial warned that the dollar's climb above 102 and the U.S. Treasury yield curve could further pressure metals, but a reversal might offer relief.
Meanwhile, traders are bracing for fresh volatility as U.S.-Iran tensions linger, with oil flows from West Asia easing the war‑risk premium yet keeping investors wary; a gold dealer in Delhi noted that the price swings have rattled small‑time investors.
RBI's decision will be followed by the central bank’s next policy meeting on May 29, where it may reassess the pace of tightening amid global rate expectations.