Silver prices extended their sharp fall on Monday, March 23, as rising geopolitical tensions in the Middle East rattled global markets and pushed investors away from precious metals.
On the domestic front, MCX silver prices declined 6% or ₹13,606 at ₹2,13,166 per kg, while MCX gold also slipped around 5% or ₹7,115 to ₹1,37,377 per 10 gram, tracking weakness in global markets.
In the international market, spot silver fell 3.2% to $65.61 per ounce, while spot gold dropped 2.5% to $4,372.86 per ounce. Gold has now fallen for nine straight sessions, hitting its lowest level since early January and losing more than 10% over the past week.
Meanwhile, U.S. gold futures plunged 4.4% to $4,375.60 per ounce, indicating continued bearish sentiment.
Other precious metals also remained under pressure. Platinum declined 2.9% to $1,866.65, while palladium slipped 0.5% to $1,397.25 per ounce.
Why are gold and silver prices falling?
The recent decline in gold and silver is being driven by a mix of geopolitical tensions, rising oil prices, and shifting interest rate expectations.
have surged above $110 per barrel, raising concerns about inflation globally. Higher inflation typically forces central banks, including the U.S. Federal Reserve, to delay interest rate cuts or even keep rates higher for longer.
This creates a negative environment for and , as they are non-yielding assets—meaning they do not offer interest. When interest rates stay elevated, investors tend to move money into interest-bearing instruments instead.
At the same time, the escalating conflict in the Middle East has added another layer of uncertainty. Escalating the three-week-old war, Iran said on Sunday that it would strike the energy and water systems of its Gulf neighbours if US President Donald Trump follows through on his warning to target Iran’s electricity grid within 48 hours.
Iran also warned that it could completely shut a crucial waterway and target energy, IT, and desalination infrastructure if its facilities are attacked.
Trump had issued the warning on Saturday evening (New York time), raising fears of a broader regional conflict and disruption to global energy supplies.
At the same time, reports indicated that the US military is deploying thousands of additional marines and sailors to the Middle East, further intensifying concerns.
This has strengthened the U.S. and Treasury yields, both of which are typically negative for gold and silver. A stronger dollar makes precious metals more expensive for global buyers, further reducing demand.
more to come….