Gold, Silver Prices Drop 2% on MCX due to West Asia Tensions

Mumbai (IANS): Gold and silver prices traded significantly lower on Thursday, plummeting by up to 2% as investors closely monitored the shifting geopolitical landscape in West Asia.

On the Multi Commodity Exchange (MCX), August gold futures slid as much as 1% (or ₹1,573), hitting an intraday low of ₹1,46,444 around noon. By midday, the yellow metal cut some losses to trade at ₹1,47,860, down 0.11% (or ₹157) after touching an intraday high of ₹1,48,089 earlier in the session.

Meanwhile, July silver futures fell by ₹1,005 (or 0.43%) to trade at ₹2,34,500. The white metal experienced sharper volatility, sinking 2.12% during the session to hit an intraday low of ₹2,30,493, down from its daily high of ₹2,35,402. Earlier in the morning, gold and silver had opened on the MCX at ₹1,46,518 and ₹2,31,671, respectively.

Global Markets Pressures: COMEX Gold and Silver Sink

The bearish sentiment extended to international markets, keeping precious metals under intense pressure:

• COMEX Silver dropped over 1.29% to trade at $63.90.
• COMEX Gold shed 0.68%, trading at $4,105.30 per ounce.

Commodity analysts report that gold prices stabilized near multi-month lows following the US military’s confirmation that it completed its latest round of strikes on Iran. This announcement raised market expectations that diplomatic negotiations between the nations could soon resume.

Why are Bullion Prices Falling?

Two major economic factors are currently driving the downward trend in the bullion market:

1. Dwindling Safe-Haven Demand: The prospect of renewed diplomatic talks in West Asia cooled down the immediate panic buying that typically drives investors toward gold during crises.
2. Higher-for-Longer US Interest Rates: Expectations that the US Federal Reserve will maintain elevated interest rates for an extended period continue to weigh heavily on non-yielding assets like gold and silver, reducing their overall investment appeal.

Market participants also continue to track inflationary pressures driven by a sharp rebound in energy prices, which could heavily influence the US Federal Reserve’s upcoming monetary policy path.

Crude Oil Prices Surge Past $95 Per Barrel

In stark contrast to precious metals, the energy sector posted massive gains on Thursday. Brent crude surged over 2% to trade near $95 per barrel, while US West Texas Intermediate (WTI) crude jumped 4% to hit $93.64 per barrel, fueled by the complex geopolitical realities of the region.