Gold Falls Rs 2,500, Silver Drops as US-Iran Tensions Hit Markets

By Pranjal Gupta

New Delhi, June 1: Gold prices fell steeply in India's national capital on Monday, shedding Rs 2,500 to settle at Rs 1,60,400 per 10 grams. The drop of roughly 1.53 per cent followed weakness in global markets, which reacted nervously after fresh military exchanges between the United States and Iran pushed crude oil prices higher.

The All India Sarafa Association confirmed the figures, noting that 99.9 per cent pure gold had closed at Rs 1,62,900 per 10 grams on Friday. All quoted prices include taxes. Silver suffered an even sharper blow. The white metal shed Rs 5,000 — nearly 2 per cent of its value — to trade at Rs 2,69,700 per kilogram, down from Rs 2,74,700 in the previous session.

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The twin declines reflect how closely Indian precious metal markets track global sentiment. When geopolitical tensions flare between major powers like the US and Iran, investors tend to shift focus towards energy markets, pulling money away from metals and driving prices down. Monday's session illustrated precisely that pattern, as rising crude oil dominated market attention and left both gold and silver nursing significant losses.

"Gold started the week on a weaker note as renewed tensions between the US and Iran over the weekend boosted crude oil prices and strengthened the dollar," Saumil Gandhi, Senior Analyst - Commodities at HDFC Securities, said.

He added that the rise in US Treasury bond yields also weighed on precious metals, limiting investor appetite for assets such as gold and silver.

In the international markets, spot gold fell nearly 1 per cent to USD 4,504.97 per ounce. However, silver rose 1 per cent to USD 75.93 per ounce.

Spot gold turned volatile, quoting USD 4,500 per ounce on Monday, and silver edged up towards USD 76 per ounce, as precious metals opened the week on a cautious footing amid lingering uncertainty over the US-Iran ceasefire framework, Kaynat Chainwala, AVP Commodity Research, Kotak Securities, said.

This week, market participants will closely watch the US jobs data, comments from Federal Reserve officials and Treasury Secretary Scott Bessent, Chainwala added.

Traders will also track further developments in West Asia for fresh cues on bullion prices, she noted.

(With Inputs from PTI)