Gold Prices Drop as US-Iran Tensions Spark Oil Rates
Gold prices in India have dropped sharply due to escalating tensions between the U.S. and Iran, which have increased crude oil prices and shifted investor focus away from traditional safe-haven assets like gold.
Highlights
- •US-Iran conflict drives down gold prices
- •Dollar strengthens amid global tensions
- •Silver market also experiences decline
- •Investor appetite for precious metals wanes
In Delhi, the price of gold fell by Rs. 2500 to Rs. 160,400 per 10 grams on Monday. This decline was driven by renewed military exchanges between the United States and Iran, which have boosted crude oil prices and strengthened the dollar.
According to Saumil Gandhi, a Senior Analyst at HDFC Securities, gold's drop can be attributed to both the rise in US Treasury bond yields and the heightened global tensions. This has reduced investor appetites for risky assets like gold and silver.
Risk Appetite Declines As Investors Shift Focus
The silver market witnessed a similar trend, with prices dropping by Rs. 5000 to Rs. 269,700 per kilogram (inclusive of taxes). In the international markets, spot gold traded at nearly $4505 per ounce, but this trend remained volatile as traders awaited further developments.
Kaynat Chainwala, AvP Commodity Research from Kotak Securities, noted that precious metals began their week cautiously amidst uncertainty over the US-Iran ceasefire framework. This week will see a close watch on US job data and actions by Federal Reserve officials.
"Given the current geopolitical climate," Gandhi observed, "market participants are likely to wait for more clarity before making significant investments."
