On the Multi Commodity Exchange (MCX), gold prices declined nearly 1% or around ₹1,000 during intraday trade to touch ₹1.58 lakh per 10 grams. Silver prices saw steeper losses, falling more than ₹5,000 or 1.8% to around ₹2.71 lakh per kilogram.
The decline in domestic bullion prices mirrored losses in international markets, where spot gold slipped close to 1% to trade near $4,530 per ounce, while spot silver dropped almost 2% below the $77-per-ounce mark.
Fresh military action involving the United States and Iran unsettled global markets after reports said US forces targeted missile launch sites and mine-laying vessels in southern Iran. The escalation dampened optimism over a possible breakthrough in talks between Washington and Tehran, even as US President Donald Trump said negotiations were progressing.
At the same time, crude oil prices moved higher, with Brent crude nearing $98 per barrel and US WTI crude trading around $92 per barrel. Rising oil prices have intensified concerns over inflationary pressures globally and reinforced expectations that central banks may maintain a tighter monetary policy stance.
Manav Modi, Commodities Analyst at Motilal Oswal Financial Services, said gold prices reversed earlier gains as markets reacted to renewed fears of a prolonged conflict.
“The renewed escalation pushed crude oil prices higher after a week of declines, reigniting concerns over energy-driven inflation and keeping markets cautious,” Modi said.
He added that higher oil prices also supported the US dollar, while expectations of elevated interest rates continued to pressure non-yielding assets such as gold.
“While reports indicate the US and Iran have made progress on several negotiation points, major disagreements remain over the Strait of Hormuz, sanctions relief and Iran’s nuclear programme,” Modi said.
Market participants are now awaiting key US economic data, including GDP and inflation readings later this week, for further cues on the Federal Reserve’s rate outlook.
Meanwhile, Rishabh Nahar, Partner and Fund Manager at Qode Advisors, said the recent increase in gold import duty to 15% does not necessarily make paper gold completely immune from higher costs.
“The duty impact also gets reflected in fully-backed Gold ETFs and Gold Trading Receipts because fund houses procure physical gold as the underlying asset,” Nahar said.
According to him, the key advantage of gold ETFs and mutual funds over physical gold lies in lower making charges, storage costs and dealer margins rather than avoidance of import duty.
