SRINAGAR: Gold and silver prices rose during early trading hours on March 25, ending a five-session losing streak on the Multi Commodity Exchange (MCX), supported by renewed demand for safe-haven assets amid tensions in West Asia. However, gold has largely remained on a downward trajectory since the start of the United States–Iran conflict earlier this month.
The decline in gold prices has been driven by a stronger US dollar, rising crude oil prices, and higher interest rates—factors that typically reduce the appeal of bullion.
According to exchange data, MCX gold was trading 3.6 per cent, or Rs 5,119 higher, at Rs 147,314 per 10 grams as of 9:38 a.m. on Wednesday, compared to Rs 142,195 at the previous close. After the market opened, prices surged nearly 4 per cent to hit an intraday high of Rs 147,925 per 10 grams on March 25.
Silver also recorded strong gains. As per MCX data, silver prices were up 5.58 per cent, or Rs 12,504, at Rs 236,445 per kilogram as of 9:40 a.m., compared to Rs 223,941 at the previous market close.
On the global front, NYMEX-based COMEX gold prices rose 3.82 per cent to $4,568.70 per ounce as of 12:07 a.m. (EDT), compared to the previous close of $4,402, according to official data. COMEX silver prices also increased by 5.84 per cent to $73.635 per ounce as of 12:09 a.m. (EDT) on March 25, up from $69.569 at the previous close.
After briefly recovering early last week, gold prices resumed their decline from March 18 amid evolving geopolitical developments, continued tensions in West Asia, and rising US dollar and crude oil prices.
MCX gold has fallen nearly 19.5 per cent since the onset of the West Asia conflict, dropping from Rs 170,055 per 10 grams on March 2 to Rs 142,195 at the previous market close.
Gold prices generally share an inverse relationship with the US dollar, as a stronger dollar makes the metal more expensive for investors holding other currencies. This trend, along with elevated interest rates and diminishing expectations of a US Federal Reserve rate cut, has weighed on prices.
Data from the Bloomberg US dollar spot index showed the greenback was down 0.15 per cent at 98.285 as of 11:54 p.m. (EDT) on March 24. The softer dollar has, in turn, supported demand for gold by making it relatively cheaper for buyers.
Despite this, gold prices have remained highly volatile in recent days, reacting to mixed signals from the West Asia conflict. Growing concerns over global inflation have also prompted investors to return to gold as a safe-haven asset, even as discussions around possible de-escalation continue.
President Trump on March 24 stated that the United States and Iran are engaged in talks for a potential peace agreement. However, according to a Bloomberg report, the United States is also preparing to deploy around 2,000 troops to West Asia if tensions escalate further, particularly in relation to the Strait of Hormuz and its impact on global oil trade.
