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Gold, Silver Prices Crash as Trump-Iran Tensions Spike Dollar

Gold and silver prices experienced a sharp selloff, with MCX gold and silver futures dropping significantly due to profit-taking and a stronger US dollar. The rupee also hit a record low against the dollar, exacerbating the decline in domestic bullion prices. Rising geopolitical tensions, centered on a US deadline to Iran over the Strait of Hormuz, heightened recession fears and expectations of a higher-rate environment. Analysts suggest investors avoid panic and view the market correction as an opportunity to accumulate assets at lower prices.

Key Points: Gold, Silver Prices Plunge on Geopolitical Tensions, Strong Dollar

  • Gold futures fell nearly 7%
  • Silver futures dropped over 8%
  • Strong dollar and rising real yields pressured prices
  • US-Iran Strait of Hormuz deadline fueled fears
  • Analysts advise using correction for accumulation
2 min read

Gold, silver prices drop sharply over rising geopolitical tensions

Gold and silver prices plummet sharply as US-Iran tensions strengthen the dollar and raise real yields, wiping trillions in market value.

"possibility of higher rates pushed real yields up, reducing bullion's appeal as an inflation hedge - Analysts"

New Delhi, March 23

Gold and silver prices plummeted further on Monday, over profit‑taking, a stronger US dollar and rising real yields.

MCX gold April futures lost 6.91 per cent to Rs 1,34,506 per 10 grams around 3.30 pm on an intraday basis. Meanwhile, MCX silver May futures declined 8.84 per cent to Rs 2,06,716 per kg.

Analysts said that the sharp selloff has wiped off roughly $2 trillion in market value within hours, due to strong profit booking.

The US dollar strengthened 0.45 per cent on an intraday basis as the USD index climbed to 100.10, making dollar‑priced bullion expensive for holders of other currencies. Rupee also fell 33 paise to fresh all-time low of 93.86 against US dollar on Monday.

International spot gold traded notably lower as Comex Gold shed over 2.4 percent to $4,492 an ounce, and silver dropped 4.7 percent to just above $67 per ounce.

Gold prices had earlier witnessed a much steeper decline on Monday, dropping by over 10 per cent to around Rs 1.29 lakh per 10 grams in the domestic futures market, but later regained.

Analysts noted that surging oil prices raised input costs and heightened recession fears among investors, which in turn caused expectations of a "higher‑for‑longer" rate environment. The possibility of higher rates pushed real yields up, reducing bullion's appeal as an inflation hedge, they explained.

US President Donald Trump's 48-hour deadline to Iran for fully opening the Strait of Hormuz was set to expire on Monday creating concerns among commodities traders. President Trump had warned that Iran's power plants would be "obliterated" if the shipping lanes are not open.

Meanwhile, Iran's administration has responded with threats to attack energy infrastructure of Gulf countries, adding that the Strait of Hormuz is not blocked and navigation continues in the waterway, with necessary measures being taken due to wartime conditions.

Market participants advised investors to avoid panic and continue their systematic investment plans (SIPs) and use market corrections as an opportunity to accumulate more units at lower prices.

- IANS

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Reader Comments

P
Priya S
Good advice at the end to continue SIPs and not panic. Market corrections are indeed opportunities. But for middle-class families in India, gold is not just an investment, it's emotional security. Such sharp drops are very unsettling.
A
Aditya G
The real issue is the falling rupee. At 93.86 against the dollar, everything imported becomes costlier. This drop in gold/silver prices might be temporary if the rupee weakness continues. Our RBI needs to step in more strongly.
S
Sarah B
Watching from a finance perspective, the link to oil prices and US-Iran tensions is clear. India is a huge importer of both oil and gold. This geopolitical instability in the Gulf is a double whammy for our economy. Hope diplomacy prevails.
K
Karthik V
While the advice is to stay calm, I respectfully disagree with the analysts' generic "buy the dip" message for the average Indian. Many invest in physical gold, not paper futures. For them, such volatility shakes faith in the asset class itself. We need more nuanced guidance.
M
Meera T
Silver down 8.84%! That's huge. I was considering it for investment as it's more affordable than gold. This news makes me pause. But maybe it's a good time for a small purchase? The article says it regained from an even steeper fall, so there is some support.

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