Precious Metals Prices Decline Amid Ongoing Middle East Tensions

Market Update: 24 March

Precious metals continued to slide on Tuesday, with May silver futures on COMEX plummeting $3.24 to an intraday low of $66.15 per troy ounce, and April gold futures dropping $101 to hit an intraday low of $4,306 per troy ounce.

Gold and Silver Prices Witness Wild Swings

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Gold and silver prices experienced significant fluctuations in the previous session following statements from US President Donald Trump and Iranian officials regarding a potential end to the war. The metals initially showed a sharp intraday recovery before closing in the red.

Middle East Tensions Remain Elevated

Tensions in the region remained high on 24 March, fuelling concerns that a prolonged conflict could lead to higher interest rates and stoke inflation. The ongoing exchange of missiles in West Asia has now entered its 25th day, with recent US-Israeli strikes targeting a gas pressure-regulation station and an associated administrative building in Iran's central Isfahan province.

Impact on Oil Prices and Interest Rates

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Higher oil prices have reduced the likelihood of US Federal Reserve rate cuts this year, with traders fearing that elevated energy prices may lead to rate hikes to contain inflationary pressures. These concerns have already fed into bond markets, with US Treasury yields rising and making non-yielding bullion less attractive to investors.

Domestic Market Update

In the domestic market, the April gold futures contract on MCX dropped ₹2,968 per 10 grams to hit an intraday low of ₹1,36,292, while the May silver contract tumbled ₹11,605 per kilogram to ₹2,13,562.