Gold and silver prices fall sharply in Indian markets, tracking a decline in global markets.

On MCX, August gold futures fell 0.50% to ₹34,347 per 10 gram while October contracts declined 0.6% to ₹35,206. Silver contracts saw a sharper fall, with September contracts on MCX declining nearly 1% to ₹40,830 per kg. In global markets, gold prices fell to two-week lows after US Fed last night tampered market expectations of a lengthy easing cycle even though it cut rates by 25 basis points as expected.

In Delhi spot markets, gold prices were ruling at ₹35,795 per 10 gram, according to the All India Sarafa Association. Silver rates crashed by ₹590 to ₹41,530 per kg.

The US dollar today rose to a two-year high against a basket of other currencies, further putting pressure on gold prices. Spot gold prices were down 0.2% at $1,410.42 per ounce, after falling to its lowest since July 17 at $1,405.50. Tracking gold, silver prices also saw a sharp decline, falling 0.5% to $16.17 per ounce.

Despite Powell’s comments, many analysts remain positive on gold, which has risen close to 10% so far this year.

Global slowdown, trade uncertainty, geopolitical tensions, and buying by central banks are supposed to support gold prices, say analysts. On the trade talks front, US and China, prolonged an uneasy truce after negotiators of both the countries ended a brief round of trade talks with little sign of progress. But they agreed to meet again in September.

On the other hand, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.18% to 823.42 tonnes on Wednesday from Tuesday.

Gold demand in India went up by 13% during in the June quarter to 213.2 tonnes, driven by lower prices in April and May, World Gold Council (WGC) said in a report.

But, lately, high gold prices have hit demand, say some jewelers. Gold attracts an import duty of 12.5% and 3% GST in India.