Gold and silver prices witnessed a sharp decline in domestic futures trade on Monday, with the Multi Commodity Exchange (MCX) recording significant losses amid heightened volatility triggered by geopolitical developments in the Middle East. The fall comes as investors reacted to renewed missile exchanges between Iran and Israel, which have added uncertainty to global financial and commodity markets.

At the start of trading on Monday morning, MCX gold August futures dropped by 1.27%, falling by more than ₹1,800 to trade at ₹1,53,695 per 10 grams at around 9:05 am. Silver also saw a steep decline, with July futures slipping 2.35% to ₹2,42,763 per kilogram. The sharp correction reflects shifting investor sentiment, as traders moved away from safe-haven assets following recent price surges.

Despite traditional expectations that geopolitical tensions drive demand for gold, the metal continued its downward trajectory in global markets as well. International gold prices fell by as much as 0.7%, hovering near $4,300 per ounce. The decline follows a broader weakening trend, with gold already dropping nearly 5% in the previous week amid fluctuating risk appetite and profit booking by investors.

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Market analysts noted that recent price movements have been influenced heavily by developments in the Middle East, where Israel and Iran have exchanged military strikes. Israeli authorities confirmed targeted attacks on military installations in Iran following intercepted missile fire toward Israeli territory. The escalation initially boosted volatility across commodities, but subsequent market adjustments led to selling pressure in precious metals.

Traders suggest that while gold is traditionally viewed as a safe-haven asset during times of conflict, short-term corrections often occur when investors lock in gains after rapid price increases. The ongoing uncertainty surrounding the ceasefire framework between Iran and Israel has kept global markets on edge, with fluctuations expected to continue in the near term.

Experts indicate that further movement in gold and silver prices will largely depend on the direction of geopolitical developments and global interest rate expectations. For now, precious metals remain under pressure as investors reassess risk levels amid rapidly changing international conditions.

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