Gold, silver prices fall as stronger dollar and Iran tensions unsettle markets

Gold and silver prices declined sharply in international markets on Thursday as investors reacted to renewed geopolitical tensions in the West Asia, a stronger US dollar and rising concerns that inflation could remain elevated for longer.

Spot gold fell nearly 2 per cent to $4,368.99 per ounce, while COMEX gold futures were down 1.80 per cent at $4,367.90 per ounce.

Silver prices also came under pressure, with spot silver dropping more than 3 per cent to $71.94 per ounce. COMEX silver futures declined 3.56 per cent to $72.22 per ounce.

Trading on India’s Multi Commodity Exchange (MCX) remained suspended for the day due to the Eid al-Adha holiday.

Market analysts said uncertainty surrounding the ongoing tensions between the United States and Iran continued to weigh heavily on investor sentiment.

Gold prices hovered near the $4,450-per-ounce level after recording losses for a second straight session, as negotiations between Washington and Tehran showed little sign of progress.

Among the major sticking points are Iran’s insistence on maintaining control over the Strait of Hormuz and preserving its nuclear programme. Meanwhile, US President Donald Trump has reiterated that Washington would not agree to what he called a “bad deal” and ruled out lifting sanctions despite repeated calls from Tehran for economic relief.

Commodity experts said the rise in crude oil prices was also increasing inflationary concerns globally, reducing expectations that major central banks would cut interest rates in the near future.

“Persistent geopolitical uncertainty, elevated oil prices and a stronger dollar are likely to keep precious metals volatile in the coming weeks,” analysts said.

They added that expectations of interest rates remaining higher for longer continued to weigh on bullion markets. Gold is currently trading more than 15 per cent below the levels seen when the conflict first escalated.

Meanwhile, crude oil prices surged more than 3 per cent after reports that Iran’s Revolutionary Guards had targeted a US airbase in response to recent American military action, intensifying fears of supply disruptions and broader inflationary pressures.

With IANS inputs