In the midst of the Middle East crisis, why are the prices of gold and silver decreasing instead of increasing?

Amidst the ongoing crisis in the Middle East, while there are reports of rising crude oil prices and shortage of LPG cylinders, there is also news that the prices of gold and silver are unexpectedly falling. Generally, in case of any global crisis, the prices of gold and silver increase, but this time despite the crisis like Iran-Israel war, the prices of gold and silver are falling.

Seeing this trend, many investors are worried as to why this is happening. Especially gold and silver are considered very safe investments in difficult times. On Monday, the price of gold fell from around Rs 8 thousand to Rs 1.36 lakh per 10 grams, while the price of silver fell from around Rs 26 thousand to around Rs 2 lakh per kg.

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Why is the price falling?

According to experts, one of the biggest reasons for falling prices is that when the crisis started, people started investing in gold and silver in large numbers because it is considered very safe in difficult times, due to which its prices went up a lot, but now there is a tendency among people to sell to earn profit, hence a decline in the prices of gold and silver is being seen.

More trust on FD

Another reason is that the possibility of inflation has increased due to increase in the price of crude oil across the world, due to which interest rates are showing a trend of increasing instead of decreasing. For these reasons, many people are keeping their money in the form of FD or bonds instead of investing in gold or silver.

Same trend in the world too

The same trend is being seen not only in India but also in the world. Spot gold price in America has fallen by 2.5 percent from $ 4372 an ounce while future gold price has fallen by 4.4 percent. The price of gold has been falling continuously since January and is at its lowest level since then. Then due to continuous falling in the price of gold, the trend of selling is increasing among the people due to which the prices fall further.

Speculation is also the reason

Some experts also say that gold and silver had risen very rapidly in the last few months, due to which they became technically ‘overbought’ and a correction was considered natural in the market language.

Apart from this, trading/speculation had also increased in these metals, in such an environment even small news becomes the reason for sharp decline.

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Demand for jewelery is also less

Gold demand in India is projected to remain under some pressure in 2026 compared to 2025, as higher prices are reducing jewelery demand. Therefore, while global prices are falling, domestic demand is also relatively weak, due to which gold and silver prices are in a ‘falling’ phase in India.