Gold Slumps To 4-Month Low As Rate Concerns Deepen

Gold prices continued to fall on Monday, dropping more than 3%, declining to the lowest level in four months amid rising tensions in the Middle East, adding to inflation worries and reinforcing expectations that global interest rates may stay elevated.

Spot gold was down 3% or around $4,340 per ounce, and US gold futures for April delivery fell 5% to $4,347.

MCX gold saw a sharp gap-down start, opening near ₹1,40,158 per 10 grams compared with its previous close of ₹1,44,492.

Selling pressure intensified through the session, dragging prices to an intraday low of ₹1,36,403, a fall of about ₹8,000 or nearly 5.6%.

The metal lost several sessions, including a large drop of more than 10% last week.

Spot silver also moved lower by 3.3% to $65.55 per ounce. The weakness was visible across the precious metals space.

Platinum dropped 4.4% to about $1,838 per ounce, while palladium stood near $1,398 or 0.4% down. The decline suggests a broad pullback rather than isolated pressure on gold.

Why Are Prices Falling?

The oil price hike has further aggravated inflation concerns and as a consequence, financial markets have diminished optimism for the US Federal Reserve and other central banks to initiate rate cuts at an early stage.

At the same time, the US dollar has strengthened. A more powerful dollar causes gold and silver to be pricier to world purchasers, thus decreasing demand.

The joint effect of higher yields and a strong dollar has counterbalanced the normally protective attractive force of precious metals.

This shift has weighed on gold, which has now declined for eight straight sessions as higher interest rates reduce its appeal.

Crude prices remained volatile on Monday after US President Donald Trump warned Iran to reopen the Strait of Hormuz within two days or risk strikes on its power infrastructure.

Iran responded by signalling it could shut the key shipping route and target critical facilities across the region if provoked.

At the same time, market expectations have shifted sharply, with a US rate hike now seen as more likely than a cut this year.

Also Read - FPI Selling Goes Past ₹1 Lakh Crore In 2026

What Can Investors Watch Next?

Over the next few days, investors can closely monitor several major factors. If US bond yields keep going up, then gold and silver might face selling pressure for quite some time.

If the US dollar remains strong over time, that could hinder the precious metals from gaining.

Tensions in the Middle East remain a key factor. Any disruption to oil supply can shift market sentiment and may drive demand for safe-haven assets higher.

Sources:

Livemint

ET