Gold and silver futures fell sharply on India’s Multi Commodity Exchange (MCX) on Monday, with gold dropping approximately 1% and silver sliding more than 2%.
The sell-off was driven by a broader risk-off dynamic as crude oil prices jumped on escalating geopolitical tensions between the United States and Iran.
The energy spike bolstered the US dollar, which in turn pressured non-yielding assets like precious metals.
The market move reflects a revival of inflation fears and renewed bets on a Federal Reserve interest rate hike.
A stronger dollar and higher real yields typically erode the appeal of gold and silver, as they offer no yield and become more expensive for holders of other currencies.
Traders are repricing the probability of tighter monetary policy, reversing some of the recent optimism that had supported the metals sector.