Mumbai: Gold and silver prices declined sharply in global markets on Thursday as rising geopolitical tensions and a stronger US dollar reduced investor confidence in precious metals.
Fresh US military action against Iran and fears of rising inflation also added pressure on bullion prices.
Spot gold slipped nearly 2 percent to USD 4,368.99 per ounce, while COMEX gold traded 1.80 percent lower at USD 4,367.90 per ounce.
Silver prices also remained weak, with spot silver falling over 3 percent to USD 71.94 per ounce. COMEX silver dropped 3.56 percent to USD 72.22 per ounce.
MCX Remains Closed For Eid al-Adha
In India, trading activity remained limited as the Multi Commodity Exchange (MCX) stayed closed on Thursday due to Eid al-Adha.
Commodity market experts said investors remained cautious because uncertainty around the ongoing US-Iran negotiations continued to dominate global markets.
Gold traded near the USD 4,450-per-ounce mark after falling for two straight sessions as tensions between Washington and Tehran showed no signs of easing.
US-Iran Dispute Keeps Markets Nervous
According to market experts, one of the key issues in the talks is Iran’s demand to maintain control over the Strait of Hormuz and continue its nuclear programme.
Meanwhile, US President Donald Trump has maintained that Washington will not agree to what he called a 'bad deal' and ruled out easing sanctions on Iran.
Analysts said rising crude oil prices are increasing fears of higher inflation across the world. This could force central banks to keep interest rates elevated for a longer period, which generally hurts gold prices.
Crude Oil Prices Jump Over 3 percent
Meanwhile, crude oil prices surged more than 3 percent after reports said Iran’s Revolutionary Guards targeted a US airbase in response to American military action.
The latest developments have raised concerns about possible supply disruptions in the global oil market and higher inflation in the coming months.
Experts believe precious metals may remain highly volatile in the near term due to geopolitical tensions, rising oil prices and uncertainty over interest rate cuts.
