In the global market, COMEX gold fell about 1% to around $5,100 per ounce, while COMEX silver declined roughly 0.5% to $83.83 per ounce, reflecting continued profit-taking and cautious sentiment in precious metals.
Gold futures have declined about 2.8% from $5,247.90 on February 27 — a day before the war began — to about $5,100 on March 9, according to data available on investing.com.The trend contrasts with the surge seen during the Russia–Ukraine conflict, when bullion prices rallied sharply and remained elevated for an extended period amid global uncertainty.
Also read: Gold near ₹1.60 lakh per 10 grams in India, silver slips to ₹2.65 lakh per kg
Rate-cut uncertainty keeps gold range-bound
A key factor limiting bullion’s upside is uncertainty over global interest rates. Elevated inflation risks and the spike in energy prices have made markets cautious about how quickly the US Federal Reserve can begin easing monetary policy.Jateen N Trivedi, VP and Research Analyst (Commodity & Currency) at LKP Securities, said the uncertainty around rate cuts is capping fresh buying interest.
“Gold traded slightly weaker near $5,100. Rising inflation concerns amid ongoing war-related risks are making the Federal Reserve cautious on rate cuts, which is limiting fresh upside momentum in bullion,” he said.
According to him, MCX gold is expected to trade in a broad range of ₹1,58,000 to ₹1,64,000 in the near term, with geopolitical developments and interest-rate expectations remaining the key drivers.
India’s consumption dynamics also highlight the country’s heavy dependence on imports. Domestic gold production is estimated at roughly 1,600 kg annually, while India imports around 600–800 tonnes each year to meet demand.Investment demand through exchange-traded funds has moderated as well. India’s gold ETFs recorded net inflows of $565 million in February, marking a 77% decline from the previous month.
However, the country still extended its streak to eight consecutive months of inflows, indicating that investor interest has not disappeared despite the recent cooling in prices.
Profit-booking and liquidity pressures
Bullion had already rallied strongly in the months preceding the conflict. When prices spiked after the geopolitical shock, several investors chose to book profits rather than add fresh positions.
At the same time, the sharp decline in equity markets has created liquidity pressures. When stocks fall steeply, investors often sell profitable assets to raise cash or cover losses elsewhere. Since gold delivered strong returns over the past year, some holdings are now being trimmed.
The shift in capital is also visible across commodity markets. With crude oil prices surging towards $120 per barrel amid supply disruptions and geopolitical tensions, investor attention has partly shifted to energy markets, reducing near-term momentum in precious metals.
The dollar is winning the safe-haven race
Another factor behind bullion’s muted performance is the strengthening US dollar. During conflicts in oil-producing regions, crude prices typically rise, and the global oil trade — largely denominated in dollars — increases demand for the currency.
As the dollar strengthens, commodities priced in it become more expensive for international buyers, often limiting gains in gold and silver. At the same time, investors are rotating funds into US Treasuries and other dollar-denominated assets that compete with gold for safe-haven flows.
Kaynat Chainwala, AVP – Commodity Research at Kotak Securities, said the dollar has emerged as the preferred refuge for investors amid escalating tensions in West Asia.
“COMEX gold and silver have extended losses from last week as the US dollar acts as the primary safe-haven amid escalating tensions in West Asia,” she said, adding that liquidity stress and forced liquidations during the broader market sell-off have also weighed on bullion prices.
