- Gold, silver prices decline amid stronger dollar, geopolitical tensions.
- US-Iran conflict and rising crude oil prices fuel inflation concerns.
- Silver prices drop over 3%, gold down nearly 2% on Thursday.
Gold and silver prices weakened sharply in international markets on Thursday as investors reacted to a stronger US dollar, rising geopolitical tensions in West Asia and growing concerns that inflation could remain elevated for longer.
Fresh US military action against Iran and uncertainty around ongoing negotiations between Washington and Tehran added to pressure on bullion markets, while rising crude oil prices further complicated the global inflation outlook.
Gold Falls for Second Straight Session
Spot gold slipped nearly 2 per cent to $4,368.99 per ounce, while COMEX gold traded 1.80 per cent lower at $4,367.90 per ounce.
The decline extended losses for a second consecutive session, with gold hovering near the $4,450-per-ounce level as investors reassessed the impact of geopolitical risks, interest rates and currency movements.
Market experts said bullion remained under pressure as investors tracked developments surrounding the US-Iran conflict and the broader implications for energy prices and inflation.
Why Investors Are Turning Cautious on Bullion
Analysts said uncertainty over negotiations between the US and Iran continues to dominate investor sentiment.
Among the key sticking points in the discussions are Iran’s demand to retain control over the Strait of Hormuz and preserve its nuclear programme. At the same time, US President Donald Trump has reiterated that Washington would not accept what he described as a “bad deal” and ruled out easing sanctions despite Tehran’s calls for financial relief.
The unresolved tensions have increased fears that the conflict could drag on longer than expected, keeping energy prices elevated globally.
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Strong Dollar Adds More Pressure
Apart from geopolitical uncertainty, a stronger US dollar also weighed heavily on precious metal prices.
Gold and silver often become less attractive for global investors when the dollar strengthens because bullion is priced in the US currency. Higher borrowing costs and expectations of elevated interest rates also tend to reduce the appeal of non-yielding assets such as gold.
Experts noted that markets are increasingly pricing in a “higher-for-longer” interest rate environment as energy-driven inflation risks rise again.
Silver Drops More Than 3 Per Cent
Silver prices also witnessed a sharp decline alongside gold.
Spot silver fell more than 3 per cent to $71.94 per ounce, while COMEX silver traded 3.56 per cent lower at $72.22 per ounce.
The metal has remained volatile in recent sessions as investors balance industrial demand concerns with safe-haven buying trends linked to geopolitical uncertainty.
Oil Prices Rise Again After Iran Tensions Escalate
Meanwhile, crude oil prices climbed more than 3 per cent after reports suggested Iran’s Revolutionary Guards had targeted a US airbase in response to Washington’s military action.
The development intensified concerns over possible supply disruptions and renewed fears around the Strait of Hormuz, one of the world’s most critical energy shipping routes.
Rising oil prices have become a major concern for global markets because they directly influence inflation, transportation costs and central bank policy expectations.
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MCX Remains Closed on Eid al-Adha
Back home, trading activity remained muted as the Multi Commodity Exchange (MCX) stayed closed on Thursday on account of Eid al-Adha.
Domestic traders will now closely monitor international bullion and crude oil movements when trading resumes, especially as volatility in global commodity markets continues to rise.
What Markets Are Watching Now
Market experts believe precious metals are likely to remain volatile in the near term as investors track geopolitical developments, crude oil prices and signals from major central banks.
While gold traditionally benefits during periods of uncertainty, the current combination of elevated oil prices, sticky inflation concerns and a stronger dollar has created a more complicated environment for bullion markets.
