Gold, Silver Crash Despite War Fears, Prices Slide Up To 10% As Rate Hike Worries & Profit Booking Hit Safe Havens

Mumbai: Gold and silver prices fell sharply on Monday, surprising investors. Usually, these metals rise during wars or global tensions. However, despite the ongoing conflict in West Asia, prices moved in the opposite direction.

Around 1:00 pm on MCX, gold futures were trading at Rs 1,30,891, down Rs 13,601 or 9.41 percent. Silver futures fell even more, dropping Rs 23,157 or 10.21 percent to Rs 2,03,615. This shows stronger selling pressure in silver compared to gold.

Profit Booking After Big Rally

One of the main reasons for this fall is profit booking. In recent months, both gold and silver had risen sharply as investors rushed to safe-haven assets.

With prices already very high, many investors are now selling to lock in profits. This has led to a sudden correction in prices.

Interest Rate Fears Weigh on Gold

Another important reason is changing interest rate expectations. Crude oil prices remain above $100 per barrel, increasing inflation concerns.

Because of this, markets now expect possible rate hikes instead of rate cuts. Higher interest rates make gold less attractive, as it does not give fixed returns like bonds or deposits.

Global Sell-Off and Liquidity Pressure

Global market conditions are also playing a role. Gold prices have been falling for several days and have dropped more than 10 percent in the past week.

Experts say investors are selling gold to cover losses in stock markets. When equities fall sharply, investors often sell gold to manage cash needs. This is called liquidity pressure.

Silver, which is more volatile, has seen an even sharper decline due to similar reasons.

All Assets Under Pressure

The current market situation shows a broad sell-off across asset classes. Stocks, bonds, and even safe-haven assets like gold are falling together.

Experts say such situations happen during extreme uncertainty, when investors reduce risk across the board.

What It Means for Investors?

This fall does not mean gold and silver have lost their safe-haven status. It is mainly a correction after a strong rally.

Investors should stay calm and avoid panic selling. Markets may remain volatile until global tensions and interest rate trends become clearer.