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Gold Price: On Tuesday, gold prices in the country’s capital Delhi fell by ₹2,800 to ₹1.62 lakh per 10 grams. Military tension between Washington and Tehran has turned investors’ interest towards the US dollar. According to All India Bullion Association, the price of 99.9% pure yellow metal fell by ₹2,800 to ₹1,62,400 per 10 grams (including all taxes). On Monday, gold had closed at ₹ 1,65,200 per 10 grams. At the same time, according to the association, silver prices increased by ₹ 2,000 to ₹ 2,73,000 per kg (including all taxes). In the last session it had closed at ₹2,71,000 per kg.

Why did gold prices fall?

Saumil Gandhi, Senior Analyst, Commodities, HDFC Securities, said gold prices fell on Tuesday and remained in a narrow range as investors remained cautious due to uncertainty over US-Iran talks. He further said that due to no major breakthrough on the diplomatic front, most market players remained on the sidelines, refrained from making any big bets and kept waiting for more clarity on the geopolitical front. Gandhi said that due to lack of clarity in the situation, precious metals remained stuck in a range. Apart from this, the market is closely monitoring the movement of crude oil, US dollar and treasury yield (return on government bonds) to decide its direction.

Gold fell in foreign markets also

In the international market, spot gold fell nearly 1 percent to US$4,534.69 an ounce, while silver fell a little more than 2 percent to US$76.49 an ounce. Analysts said market sentiment weakened after reports of new US military attacks on southern Iran, despite ongoing talks aimed at maintaining a seven-week-old ceasefire in Qatar. US Central Command said that these military operations were defensive and there was no indication of the ceasefire ending.

Tension between US and Iran

Meanwhile, Iran’s Islamic Revolutionary Guard Corps claimed to have shot down a US drone that had entered Iranian airspace. This incident added another layer of uncertainty to the already delicate negotiations. This new tension pushed up crude oil prices, renewing fears that higher energy prices could maintain global inflationary pressures and force central banks to maintain tight monetary policies for longer periods of time.

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