Gold Prices Slip Below ₹1.59 Lakh Despite Rising Middle East Tensions; Silver Extends Losses

Gold prices declined sharply in the national capital on Monday, falling below the ₹1.59 lakh mark despite escalating geopolitical tensions in the Middle East. Market experts attribute the decline to rising crude oil prices and concerns that persistent inflation could delay interest rate cuts by major central banks.

Gold Falls by ₹1,100 in Delhi

According to market data, the price of 99.9% purity gold dropped by ₹1,100 to ₹1,58,800 per 10 grams, including taxes. The precious metal had closed at ₹1,59,900 per 10 grams in the previous trading session.

Silver also witnessed significant selling pressure, declining by ₹5,000 to ₹2,55,700 per kilogram. This marked the fourth consecutive session of losses for the white metal.

Since June 2, silver prices have fallen by ₹15,300 per kilogram, representing a decline of nearly 6%.

Why Are Gold and Silver Prices Falling?

Traditionally, geopolitical tensions tend to support gold prices as investors seek safe-haven assets. However, the recent surge in crude oil prices has altered market sentiment.

Analysts believe that higher energy prices could fuel inflation, reducing the likelihood of near-term interest rate cuts by central banks. As a result, investors have reduced exposure to precious metals.

Market experts noted that concerns over inflation and interest rates have outweighed the safe-haven appeal of gold, leading to weakness in both domestic and global markets.

Weakness Seen in Global Markets

The decline was not limited to India. International precious metal markets also witnessed losses.

• Spot gold fell nearly 1% to around $4,291.79 per ounce.

• Spot silver declined approximately 1.34% to $66.93 per ounce.

At the same time, Brent crude oil prices surged by about 5% to $98.07 per barrel before trimming some gains following reports that military operations between regional rivals had eased.

Focus Shifts to US Inflation Data

Market participants are now closely watching upcoming US inflation figures, particularly the Consumer Price Index (CPI) data.

Analysts believe that if inflation comes in higher than expected, expectations of tighter monetary policy could strengthen. This may support the US dollar and create additional pressure on gold and silver prices.

A stronger dollar typically makes precious metals more expensive for international buyers, often resulting in weaker demand and lower prices.

Can Gold Become Cheaper?

Experts suggest that the short-term outlook for gold remains uncertain. Continued geopolitical tensions may provide support, but concerns about inflation, interest rates, and a stronger dollar could keep prices under pressure.

For now, traders are expected to monitor global economic data and developments in the Middle East, both of which are likely to influence the direction of gold and silver prices in the coming days.