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Gold and silver prices declined on March 24, extending recent losses as a stronger US dollar and elevated bond yields continued to pressure precious metals, even as geopolitical tensions in West Asia kept volatility high.
On the Comex, gold fell 1.17% to $4,355.80 per ounce. Silver dropped more sharply, losing 2.62% to $67.54 per ounce, reflecting broader weakness across the precious metals complex.
The decline comes after a steep correction in recent sessions, with domestic markets also witnessing heavy selling a day earlier.
In Delhi, gold prices had slumped nearly 6% to ₹1.43 lakh per 10 grams on March 23, while silver fell over 4% to ₹2.30 lakh per kg, tracking weak global cues and subdued demand.
Macro pressures outweigh safe-haven appeal
Analysts said the current phase highlights a divergence where traditional safe-haven demand is being overshadowed by macroeconomic headwinds.
Ross Maxwell, Global Strategy Operations Lead at VT Markets, said the correction is tied to the broader fallout of the Middle East conflict. “While geopolitical risks typically support gold, the surge in oil prices has intensified inflation concerns. This is reinforcing expectations that central banks will keep interest rates higher for longer, strengthening the US dollar and pushing up real yields — factors that tend to weigh on precious metals,” he noted.
Higher yields reduce the appeal of non-interest-bearing assets like gold, while a stronger dollar makes bullion more expensive for holders of other currencies.
Oil volatility and geopolitics in focus
Markets remain highly sensitive to developments around the Iran conflict, particularly due to its implications for global energy supply. Oil prices have been volatile amid concerns over disruptions in the Strait of Hormuz, a critical artery for global crude shipments.
While reports of potential diplomatic engagement between the US and Iran offered some relief to global equities, uncertainty persists. Analysts said this has created a push-and-pull dynamic for gold — with safe-haven demand on one side and inflation-driven monetary tightening expectations on the other.
Liquidity pressures and investor positioning
Experts also pointed to liquidity needs and unwinding of positions as key drivers behind the sharp correction.
According to analysts, gold’s initial spike at the onset of the conflict was followed by profit-taking and liquidation, a pattern seen in previous geopolitical shocks. Gold-backed exchange-traded funds have recorded notable outflows since the conflict began, indicating a shift in investor positioning.
Saumil Gandhi, Senior Analyst – Commodities at HDFC Securities, said rising oil prices have stoked inflation fears, prompting expectations of a more hawkish policy stance.
“This has boosted US Treasury yields and strengthened the dollar, adding further pressure on gold and silver,” he said.
Domestic impact and industry view
Industry participants said the price drop reflects broader economic disruptions linked to the conflict.
Colin Shah, Managing Director at Kama Jewelry, said the spike in crude prices due to supply disruptions is acting as a key inflationary trigger. “This is likely to make central banks more cautious, potentially leading to higher interest rates, which directly impacts gold demand. At the same time, a stronger dollar is diverting investment flows away from bullion,” he said.
He added that the volatility could weigh on domestic consumption and gems and jewellery exports in the near term.
Outlook: Volatility to persist, long-term support intact
Analysts expect continued volatility in the near term, with prices reacting sharply to geopolitical developments, oil price movements, and central bank signals.
Maxwell noted that further escalation in the conflict or additional supply shocks could trigger sharp swings in both directions. However, he added that the broader outlook remains constructive.
“Persistent inflation, fiscal pressures, and global uncertainty continue to support gold’s role as a store of value. The current correction appears more like a pause rather than the start of a sustained downtrend,” he said.
Echoing this, market participants said gold’s long-term fundamentals — including central bank buying, inflation hedging, and diversification demand — remain intact, even as short-term macro pressures dominate price action.
For now, investors are likely to track US yields, dollar strength, and developments in West Asia closely, as these factors continue to dictate the direction of precious metals.
