Gold, Silver Prices Fall Amid Heightened Tensions Over Iran Deadline

Middle East Conflict Weighs on Precious Metals

In a volatile session on 6 April, gold and silver prices declined as investors remained cautious in the face of escalating tensions in the Middle East. The situation is exacerbated by US President Donald Trump's deadline for potential attacks on Iran's power plants and infrastructure, which is fast approaching.

Comex Gold and Silver Futures Decline

Comex gold futures fell by $53 per troy ounce to hit the day's low of $4,631, while silver futures declined even more sharply by $3.06 per troy ounce to $69.78. The decline in precious metals is attributed to fading hopes of a ceasefire amid renewed threats.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Market Impact in India

In the domestic market, gold futures on MCX dropped ₹1,557 per 10 grams to hit the day's low of ₹1,48,424. Silver futures on MCX also slipped ₹8,758 per kilogram, falling below ₹2.25 lakh to touch a low of ₹2,24,621.

Escalating Tensions in the Middle East

US President Donald Trump reiterated his warning that the US would destroy Iran's power plants and bridges if the country does not reopen the Strait of Hormuz by 8 PM ET on Tuesday. He also extended the deadline to Tuesday, citing that he "thought it was inappropriate the day after Easter."

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Ceasefire Proposal Rejected

Over the weekend, hopes were reignited for a potential ceasefire after Axios reported that the US, Iran, and regional mediators were discussing a possible 45-day truce as part of a two-phase deal. However, Iran reportedly rejected the proposal and reiterated that it is seeking a permanent end to the war.

Conflict Weighs on Precious Metals

The West Asia conflict, now in its sixth week, has not only rattled risk assets but also weighed on precious metals. Fears of central banks tightening monetary policies in response to rising price pressures driven by a surge in crude and gas prices have contributed to the decline in precious metals.

US Strikes on Iran

Ahead of the deadline, Trump warned that a "whole civilization will die tonight," but added that Iran still has time to comply before the 8 PM Washington deadline. Last week, Trump said US forces would continue to strike Iran "very hard" over the next two to three weeks and warned of pushing the country "back to the Stone Age."