Gold and silver are also melting in the fire of Iran-US war. Gold and silver prices fell in the domestic futures market on Monday morning, July 13. Gold was at Rs 141977 per 10 grams on MCX at 9:10 am. This is Rs 1578 cheaper than its previous close. Similarly, silver also opened at Rs 217400 per kg. There is a huge fall of Rs 5280 in it. The main reason for the fall today was the sudden sharp rise in crude oil prices, which happened due to the increasing tension between America and Iran. This rise strengthened the US dollar, which put pressure on gold and silver.
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4 reasons for falling gold and silver prices
Oil prices boost dollar: Crude oil prices rose 4 percent, boosting demand for the US dollar, and the dollar index rose about 0.30 percent to 101.22. When the dollar strengthens, gold denominated in dollars becomes more expensive for buyers with other currencies, leading to reduced purchases and a negative impact on prices.
US-Iran tensions: According to media reports, heavy missile and drone attacks have been exchanged between the US and Iran. Iran has said it has once again closed the Strait of Hormuz, a vital sea route for the world’s crude oil supplies. Reports also claim that more than 10 missiles have landed on Iran’s Qeshm Island in Hormuz.
US strikes and military action: On July 12, US Central Command announced strikes against Iran, targeting dozens of targets with precision weapons. The action was stated to be aimed at weakening Iran’s ability to attack international shipping passing through the Strait of Hormuz.
Inflation Fears and Central Bank Tightening: A 4 percent surge in crude oil prices has rekindled inflation fears. This has raised expectations that the US Federal Reserve and other major central banks around the world may further tighten monetary policy, i.e., raise interest rates.
( Disclaimer: Experts’ recommendations, suggestions, views and opinions are their own and not those of Live Hindustan. Investing in commodity markets is subject to risks and you should consult your advisor before investing.)
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