New Delhi: Precious metals witnessed a notable decline on Tuesday, with gold and silver prices falling sharply even as geopolitical tensions persisted. The drop has left investors questioning why traditionally safe-haven assets are losing ground during uncertain times.
On the Multi Commodity Exchange, gold prices slipped by nearly ₹2,000–₹2,500 per 10 grams, registering a decline of around 1.5 per cent. Silver saw a steeper fall, dropping close to ₹8,000–₹10,000 per kilogram, with losses nearing 4 per cent during the trading session. This marks a continuation of the downward trend observed in the previous session as well.
Market analysts attribute the decline primarily to rising global bond yields and a strengthening US dollar. When bond yields increase, fixed-income instruments become more attractive to investors, reducing the appeal of non-yielding assets like gold. At the same time, a stronger dollar makes commodities priced in the currency more expensive for global buyers, further dampening demand.
Another key factor weighing on sentiment is the expectation that interest rates may remain elevated for a longer period. This outlook has discouraged aggressive inflows into gold, even amid ongoing global uncertainties.
Experts also point out that both metals had witnessed a strong rally in recent weeks, pushing prices to elevated levels. The current correction is, therefore, partly driven by profit booking, as traders lock in gains after the surge.
Silver, in particular, has seen sharper volatility due to its dual nature as both a precious and industrial metal. Concerns over global economic growth tend to impact industrial demand, amplifying price swings compared to gold.
Despite the short-term weakness, financial experts maintain that gold continues to hold relevance as a long-term hedge against inflation, currency fluctuations, and market instability. However, they caution that prices could remain under pressure in the near term if bond yields stay firm and the dollar continues to strengthen.
For investors, the current dip is being seen as an opportunity rather than a signal to exit. Analysts suggest a gradual investment approach—accumulating small quantities during price corrections instead of making large, one-time purchases. Maintaining a modest allocation of 5–10 per cent in gold within a diversified portfolio is widely considered a balanced strategy, helping manage risk without overexposure to market volatility.
