Gold and silver prices in India experienced a sharp decline as Iran-US tensions escalated following the U.S.- and Israel-backed military action that began February 28. According to NewsNation reports, Max Baecker, president of American Hartford Gold, explained that when the conflict involving Iran began, investors engaged in widespread profit-taking, leading to increased selling of gold. The disruption has been particularly significant as Iran has largely restricted access through the Strait of Hormuz, a key artery for global energy supplies. The United States has also imposed a blockade of Iranian ports, driving up fuel prices and unsettling financial markets. Recent developments show that oil prices have reached around $110 per barrel, which has pushed inflation expectations up and lowered expectations for interest rate cuts. As Baecker noted to NewsNation, "Typically, during a war, gold prices rise significantly, but with this oil situation, with the Strait of Hormuz, it's tough."
Mumbai recorded the highest gold rates among major cities at ₹1,59,050 per 10 grams for 24-carat gold, followed by Kolkata at ₹1,58,840 per 10 grams. Delhi maintained the lowest rates at ₹1,58,770 per 10 grams, according to Bullions data. In the southern markets, Chennai led with the highest rates at ₹1,59,510 per 10 grams, while Hyderabad and Bengaluru followed closely at ₹1,59,300 and ₹1,59,170 per 10 grams respectively. The southern markets continue to command premium rates across both gold and silver segments.
Silver rates showed similar regional patterns, with Mumbai recording ₹2,71,780 per kg and Delhi maintaining ₹2,71,310 per kg. Kolkata silver rates were priced at approximately ₹2,71,420 per kg. Southern markets continued to command premium rates, with Chennai and Hyderabad seeing silver trade at ₹2,72,570 and ₹2,72,210 per kg respectively, while Bengaluru followed closely at ₹2,71,990 per kg. The current silver rate in Mumbai stands at ₹2,71,780 per kg, with Delhi maintaining pace at ₹2,71,310 per kg.
The decline in gold prices has been compounded by oil prices reaching around $110 per barrel, which has pushed inflation expectations up and lowered expectations for interest rate cuts. As Baecker noted to NewsNation, "Typically, during a war, gold prices rise significantly, but with this oil situation, with the Strait of Hormuz, it's tough." This contrasts with the previous period when gold prices reached a record high of about $5,500 per ounce in January before falling roughly 16% to around $4,700. Despite the current decline, Baecker emphasized that "all the reasons for gold and silver to be substantially higher from here are still in place, including central bank demand and broader economic pressures." Recent reports suggest that US President Donald Trump is reportedly "50/50" between finalising a diplomatic agreement with Iran and authorising renewed military strikes, according to Axios, increasing concerns over possible escalation.
Recent diplomatic efforts have shown some progress despite ongoing tensions. Pakistan's army chief Asim Munir arrived in Tehran on Friday for discussions on an accord with Iranian Foreign Minister Abbas Araghchi that lasted late into the night. Iran's Defence Ministry spokesperson Reza Talaei-Nik warned that "the only way out of the third imposed war for the American-Zionist enemy, on both the battlefield and in diplomacy, is to secure the demands of the Iranian people." Iran has incorporated provisions for ending the US naval blockade and establishing arrangements related to the strategic Strait of Hormuz in a draft framework of a proposed agreement with the United States. The IRGC Navy reported that 25 ships passed through the Strait of Hormuz in the last 24 hours after obtaining permission, demonstrating some easing of tensions. US Secretary of State Marco Rubio stated that "there's been some progress done, some progress made, even as I speak to you now, there's some work being done," while acknowledging that "there is a chance that, whether it's later today, tomorrow, in a couple days, we may have something to say."
