Despite the Iran crisis, gold and silver prices are falling, which is contrary to general belief. Generally prices increase during war. The main reason for this is the strong US dollar index, which has reduced the global demand for gold.
Iran is currently facing continuous attacks from America and Israel. In response, Iran is also showing its strength by attacking Gulf countries with drones and missiles. It has been about 12 days since this war started. But one thing is surprising. Usually, whenever such a big crisis occurs in the world, the prices of gold and silver start touching the sky. But this time during the Iran crisis the behavior of the market is quite strange.
Why is gold and silver becoming cheaper amid tension?
Usually, whenever there is political tension or a major war in the world, investors invest money in gold to avoid the risk of the stock market. Gold is considered a ‘safe haven’ i.e. a safe investment. This increases the demand for gold and also its prices. But in the current situation, despite increasing war tension, the prices of gold and silver are falling instead of increasing, which is surprising for everyone.
What is the condition of gold in the international market?
When the crisis started in Iran on February 28, the price of gold in the international market was $ 5,416 an ounce. But the price has fallen to $5,108 an ounce, despite no signs of tensions in the Middle East easing. That means, even amidst this uncertainty, the yellow metal is losing its shine.
Gold and silver prices fell in the Indian market too!
The same trend is being seen on India’s Multi Commodity Exchange (MCX). On February 28, the price of 10 grams of gold was around Rs 1.67 lakh, which has now come down to Rs 1.59 lakh. Not only gold, silver prices have also fallen. On February 28, the price of one kg silver was Rs 2.89 lakh, which fell to Rs 2.62 lakh by March 13. This is causing confusion among investors.
What is the real reason for falling prices?
According to market experts, the biggest reason for the fall in gold prices despite the war is the strengthening of the ‘US Dollar Index’. When the value of the dollar increases in the international market, it becomes expensive for countries using other currencies to buy gold. Due to this, there has been a temporary decrease in the demand for gold and silver across the world, due to which a fall in prices is being seen.