Gold, Silver Prices Plunge as Mideast Tensions Rise
The prices of gold and silver plummeted on Monday in the domestic market due to escalating tensions between Iran and the US, outweighing the decline in oil prices. Gold futures for October 2026 delivery fell by Rs 1,331 to Rs 1,52,171 per 10 grams, while MCX silver futures for September 2026 delivery declined by Rs 1,600 to Rs 2,39,008 per kg.
The recent developments in the Middle East have caused investors to reassess their expectations of inflation and interest rates. US President Donald Trump warned Iran that it could face economic failure or loss of leadership if it did not reach a deal with the US. The Iranian military responded by saying they would respond harshly to any new attack.
The possibility of another global interest rate-tightening cycle is emerging as some major central banks raise rates and indicate further increases may be needed to bring down inflation. The Bank of Japan tightened monetary policy on Friday, following rate increases from the Federal Reserve and the European Central Bank earlier in the week.