Gold, Silver Prices Fall on MCX as US-Iran Tensions Escalate

Gold and silver prices declined sharply on the Multi Commodity Exchange (MCX) on Monday as heightened geopolitical tensions in the Middle East and volatility in global commodity markets weighed on investor sentiment. The decline came despite renewed safe-haven demand following fresh military exchanges between the United States and Iran. At the same time, rising crude oil prices and concerns over inflation influenced trading across precious metals.

At 9:03 am, the MCX gold August futures contract was trading 0.99 per cent lower, down Rs 1,421 at Rs 1,41,955 per 10 grams. The MCX silver September futures contract also registered a steep decline, falling 2.18 per cent or Rs 4,865 to Rs 2,17,799 per kilogram. The drop reflected cautious market sentiment as investors assessed the impact of escalating geopolitical developments and their implications for the global economy.

In international markets, gold prices also weakened after fresh exchanges of strikes between the US and Iran over the weekend intensified concerns about energy markets and inflation. Spot gold fell as much as 1.4 per cent to around $4,060 an ounce, according to Bloomberg data. The decline followed losses recorded in the previous week, indicating continued pressure on precious metal prices despite persistent geopolitical uncertainty.

Also Read: Gold Falls on Weak Demand, Silver Rebounds: Check Rates in Your City

Market participants are closely monitoring developments around the Strait of Hormuz, a strategically important shipping route through which a significant portion of the world's crude oil is transported. Tensions increased after Iran indicated restrictions on the waterway, while the United States disputed claims that the route had been closed indefinitely. The uncertainty has fuelled volatility in crude oil prices and raised concerns over potential disruptions to global energy supplies.

According to the US Central Command, American forces carried out a fourth round of strikes within a week in response to an attack on a Cyprus-flagged container ship that Washington attributed to Iran. The continued exchange of military actions has heightened fears of a prolonged regional conflict, prompting investors to closely track developments for their potential impact on inflation, interest rate expectations and global financial markets.

Analysts believe precious metals are likely to remain volatile in the near term as geopolitical risks, energy prices and central bank policy expectations continue to influence investor behaviour. While gold traditionally benefits from safe-haven demand during periods of uncertainty, expectations of higher inflation and the possibility of tighter monetary policy have limited gains. Investors are expected to remain cautious until there is greater clarity on the evolving situation in the Middle East and its impact on global markets.

Also Read: Gold Falls on Weak Demand, Silver Rebounds: Check Rates in Your City