Tensions Rise in West Asia: Impact on Gold and Silver Prices Amid Ongoing Conflict
Overview of the Current Situation
The ongoing conflict involving Iran has escalated tensions in West Asia, marking over a month since hostilities began on February 28. This turmoil has led to significant fluctuations in the prices of gold and silver, which were already on a downward trend prior to the conflict.
Price Decline of Gold and Silver
On January 29, 2026, gold and silver reached their peak prices, with gold exceeding ₹1.90 lakh per 10 grams and silver surpassing ₹4.25 lakh per kilogram. However, following the onset of the conflict, prices plummeted, with gold dropping to approximately ₹1.65 lakh and silver to around ₹2.82 lakh on the day of the conflict.
As of Thursday's market close, gold was priced at about ₹1.49 lakh and silver at ₹2.32 lakh, indicating a decline of nearly 10% for gold and 18% for silver since the conflict began.
Significant Monthly Decline in Gold Prices
March proved to be particularly challenging for gold, witnessing its largest monthly decline since 2008, with a drop of over 13%. Market analysts suggest that the risk of oil supply disruptions and the closure of the Strait of Hormuz continue to exert pressure on gold prices. As long as oil prices remain volatile, gold will likely face ongoing challenges.
Reasons Behind the Price Drop
The rapid decline in precious metal prices amid the Iran conflict can be attributed to three primary factors: the strengthening of the dollar, expectations of rising interest rates to combat inflation, and profit-taking by investors following recent price increases.
Future Price Predictions for Gold and Silver
Investors are keenly awaiting a rebound in gold and silver prices. Experts predict that an uptick may occur soon, particularly with Akshaya Tritiya approaching on April 19. Jewelers view the current price drop as an opportunity, anticipating increased demand for gold jewelry during this auspicious occasion.
Advice for Investors
According to Aksha Kamboj, Vice President of the India Bullion and Jewelers Association (IBJA), while the current price fluctuations may seem alarming, the overall trend remains positive. The recent decline is primarily due to profit-taking, which is a healthy sign.
She advises that due to the volatility in silver prices, investors should consider purchasing in installments rather than investing all at once. Although short-term fluctuations may cause some concern, this period presents a favorable opportunity for buyers looking to acquire at lower prices.