Gold and silver prices saw a decline of up to 2% on Monday, influenced by a robust US dollar and expectations of increased US interest rates amid escalating US-Iran tensions. On the Multi Commodity Exchange (MCX), gold futures for August 5 started at Rs 1,42,633, marking a 0.58% decrease from the previous close. The yellow metal dropped by 1.33% to an intraday low of Rs 1,41,557.
MCX gold was trading at Rs 1,42,100, down by 0.96%, while silver futures for September 4 fell by 2.41% to an intraday low of Rs 2,17,277. The white metal was trading at Rs 2,18,665, showing a 1.80% decline. In the international market, COMEX gold dropped by 1.27% to $4,061 per ounce, and COMEX silver fell by 0.58% to $58 per ounce.
Market experts attributed the pressure on gold prices to the strong US dollar and heightened geopolitical tensions in the Middle East, leading to concerns about inflation and potential US interest rate hikes. They mentioned that US military actions in Iran and subsequent responses from Tehran raised crude oil prices, reigniting fears of inflation driven by energy costs. Additionally, elevated US Treasury yields and a firm dollar diminished the appeal of non-interest-bearing assets like gold.
Looking ahead, investors are keen on monitoring developments in the US-Iran conflict, upcoming US economic data, and statements from the US Federal Reserve for insights into interest rates and the short-term trajectory of gold prices. Meanwhile, the Dollar Index climbed to 100.90, reflecting the US dollar’s value against a basket of major currencies. Iran’s aggressive stance post-strikes, targeting US military bases in Kuwait, Bahrain, and Jordan, added to the geopolitical tensions.
