It may seem unusual. When the world gets uncertain, gold is supposed to shine. But right now, even as geopolitical tensions remain high, gold and silver prices are slipping.
At the time of writing, MCX Gold was priced at Rs 1,34,293, down Rs 10,153 or 7.03%, while MCX Silver was at Rs 2,09,168, down Rs 17,472 or 7.70%.
So what’s changed?
Gold and silver are usually seen as safe-haven assets. .
Aksha Kamboj, Vice President at IBJA and Executive Chairperson at Aspect Global Ventures, explains, “Prices are going down due to a stronger US dollar, higher bond yields, and changes in expectations about higher interest rates, which make gold, being non-yielding, less attractive. Investors are selling gold to cover losses in other markets.”
In simple terms, even though risks are high, investors are moving money towards assets that offer returns right now.
There is also profit booking after a strong rally, and some investors are selling gold to manage losses in equities.
The current fall is less about geopolitics and more about global financial conditions.
Aditya Agrawal, CFA and CIO at Avisa Wealth Creators, says, “Macro factors are currently dominating safe-haven demand. A risk-off liquidity crunch has led investors to book profits in bullion to cover losses in equities.”
He adds that rising oil prices and inflation fears are pushing expectations of a more hawkish US Federal Reserve, which increases the opportunity cost of holding gold and silver.
In simple terms, when interest-bearing assets look more attractive, gold and silver tend to fall.
There is also a broader shift happening, where a stronger dollar and tighter liquidity are putting pressure across multiple asset classes, including precious metals.
Experts say this is not a breakdown but a correction after a strong rally.
Senthil R Kumar, MD and CEO at Nitstone Finserv, says, “The recent softening in gold and silver prices reflects a healthy market adjustment. Strong movements in the US dollar and bond yields have led to some short-term rebalancing, while a portion of the geopolitical risk had already been priced in during the earlier rally.”
For investors, the message is to stay disciplined.
Kamboj advises a staggered approach, “Investors should consider a staggered investment strategy from a long-term perspective. However, in the short term, caution is required as prices are quite volatile.”
Agrawal adds, “Investors should avoid panic selling and instead focus on asset allocation discipline. Typically, 5–10% of a portfolio can be allocated to precious metals as a hedge.”
The core reasons to hold gold and silver have not changed. Inflation risks, currency movements, and global uncertainty are still in play.
For now, short-term financial conditions are dominating. But over the long term, their role as a hedge remains intact.