Precious metals fluctuate due to Middle East tension, silver falls by nearly Rs 5,000!

Amid instability in the global market due to increasing tensions in West Asia, there was a big fluctuation in the prices of precious metals (gold and silver) on Wednesday. According to the data of India Bullion and Jewelers Association (IBJA), on Wednesday, the price of 999 purity gold reached Rs 1,60,230 per 10 grams, whereas earlier on Tuesday, the price of 999 purity gold was Rs 1,60,188. That means the price of gold has become costlier by Rs 42 in a day.

If we talk about silver, according to IBJA, on Wednesday the price of silver of 999 purity was Rs 2,66,010 per kg. Earlier last Tuesday, its price was Rs 2,70,944 per kg. That means today the price of silver has fallen by Rs 4,934 per kg.

On the other hand, if we talk about the prices of gold and silver on Multi Commodity Exchange (MCX), till the time of writing the news (around 5.57 pm), gold for April delivery was seen trading at Rs 1,62,348 per 10 grams, down by Rs 955 or 0.58 percent. Whereas silver for May delivery fell by 2.71 percent i.e. Rs 7,524 to Rs 2,70,326.

On the fall in gold and silver in the market, Manav Modi, Commodities Analyst at Motilal Oswal Financial Services Limited, said that the environment remains unstable due to mixed signals regarding the war.

US President Trump had earlier hinted that the conflict could end soon, but as of Wednesday morning the ongoing conflict between the US, Israel and Iran showed no signs of any immediate easing, with the fighting continuing for the twelfth consecutive day.

However, President Trump urged Israel to stop attacks on Iran, while Iran claimed to have laid mines in the Strait of Hormuz to prevent shipping.

As such, commodity markets are now focused on upcoming US consumer inflation data, which may provide further signals about the Federal Reserve’s policy outlook, although these data will not fully reflect the inflationary effects of rising energy prices linked to the conflict.

The expert further said that the US GDP and inflation data to be released this week will also be in focus, which will provide better clarity about the economic situation and the path of monetary policy going forward. Only this will decide the further movement of gold and silver.