Metals melt as West Asia war rages on The global trend of rising precious metal prices, once linked to inflation and geopolitical tensions, has reversed as the war in West Asia intensifies. Despite heightened uncertainties and fears of oil-driven inflation, gold and silver prices have declined sharply. Market participants and analysts attribute this downturn to a slowdown in de-dollarization efforts, rising inflation concerns, and the potential for higher interest rates. Central banks, which had previously been major buyers of gold, have started selling the metal, exacerbating the downward pressure. For silver, the decline is also influenced by reduced industrial demand, particularly in sectors reliant on metals for manufacturing. In the domestic market, gold prices have dropped 12% to around Rs 1.4 lakh per 10 grams, while silver has fallen 14% to Rs 2.3 lakh per kilogram. Internationally, gold is down 16.5% to $4,367 per ounce, and silver is at $68.5 per ounce. The decline is even more pronounced when compared to all-time peak prices recorded at the end of January. Domestically, gold has lost 19% of its value, and silver has plummeted 41%. Globally, gold is down 20%, and silver has fallen 42%. Analysts note that the war has disrupted the de-dollarization wave that gained momentum before the conflict began. The dollar index, which tracks the U.S. currency’s value against a basket of major currencies, fell from a high of 114 in September 2022 to a low of 97 by mid-February. This depreciation made precious metals cheaper in other currencies, initially boosting demand. However, the war has slowed de-dollarization, and fears of inflation have raised expectations for higher interest rates.#gold_prices #central_banks #silver_prices #precious_metals #west_asia_war
