Gold Prices Fall Despite Rising Global Tensions as Stronger Dollar Dampens Safe-Haven Demand

Gold May futures fell by Rs 1,055, or 0.7 per cent, to Rs 1,50,160 per 10 grams on the Multi-Commodity Exchange (MCX) on Monday, April 13, even as global tensions escalated following the failure of US-Iran ceasefire talks. Silver fared worse, with May futures dropping Rs 5,424, or 2.23 per cent, to Rs 2,37,850 per kilogram. The decline in bullion prices came amid rising fears of supply disruptions after the US announced a blockade of the Strait of Hormuz, a critical oil shipping lane, pushing crude oil prices above $100 per barrel. While such geopolitical flare-ups typically boost demand for safe-haven assets like gold, this time the metal bucked the trend. A stronger US dollar and diminishing expectations of imminent interest rate cuts by the US Federal Reserve undercut gold’s appeal. Spot gold slid to $4,694 per ounce, its lowest in a week, as higher real yields made non-yielding assets less attractive. Despite the drop on the exchange, domestic retail prices remained steady, with 24 karat gold in major cities like Hyderabad, Mumbai, and Delhi priced between Rs 1,53,830 and Rs 1,54,920 per 10 grams. The broader trend remains downward: gold prices have now fallen nearly 11 per cent since late February, reflecting sustained pressure from macroeconomic forces outweighing episodic geopolitical risks.