Mumbai, March 30: As the conflict between the United States and Iran enters its fifth week, the commodity market is showing signs of decline. On the first trading day of the week, both gold and silver prices experienced weakness. Despite rising geopolitical tensions and uncertainty, investor sentiment appears to be weakening, putting pressure on precious metals.
On Monday morning around 10:43 AM, gold for April contracts on the MCX fell by 0.68 percent, or ₹982, settling at ₹1,43,300 per 10 grams. Meanwhile, silver for May contracts saw a slight increase of 0.34 percent, or ₹767, trading at ₹2,28,721 per kilogram. However, silver also recorded a decline during early trading.
Last Friday, gold and silver had already shown slight decreases, with gold closing at ₹1,44,401 per 10 grams and silver at ₹2,27,750 per kilogram.
Global markets have also witnessed a drop in gold prices, erasing nearly all gains from the previous week. Despite increasing tensions in the Middle East, activities of Iran-backed groups, and a rise in U.S. military deployments, investor interest in safe-haven assets appears to be waning. In early trading, international gold prices fell by approximately 1.7 percent.
The commodity exchange (COMEX) also faced pressure on gold prices. On Monday, gold dropped over 2 percent to reach $4,447.50 per ounce, although buying at lower levels led to a slight recovery, bringing prices back near the $4,500 per ounce mark.
Experts indicate that rising crude oil prices and inflation fears have impacted gold demand. Additionally, the likelihood of the U.S. Federal Reserve and other central banks maintaining or increasing interest rates is seen as a negative signal for gold prices.
Since the onset of the war, gold prices have fallen by more than 15 percent. The allure of gold, typically considered a safe investment, has weakened and appears to be aligning more closely with stock market movements.
Moreover, there have been changes in gold purchases by central banks. In recent years, central bank buying has been a significant factor in rising gold prices. However, recent developments show that countries like Turkey have begun selling their gold reserves. Reports indicate that Turkey sold approximately 60 tons of gold, worth over $8 billion, in the first two weeks of the war.
Additionally, several countries that are major gold buyers are also energy importers. Consequently, rising crude oil prices limit their availability of dollars for gold purchases, impacting demand.
My name is Narendra Jijhontiya. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including TECHNOLOGY, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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