Both gold and silver were little changed in Thursday’s session, as a strong US dollar and fading expectations of near-term interest rate cuts by the US Federal Reserve made precious metals less attractive to investors, even as tensions in the Middle East remained high.
The April futures contract on COMEX gold dropped $64.4 to the day’s low of $5,114.6 per troy ounce on 12 March, erasing nearly half of the previous session’s gains. The May contract on COMEX Silver also fell, dropping $1.47 per troy ounce to reach the day’s low of $84.06 earlier in the session.
Middle East tensions escalate
The Israel–Iran conflict has entered its 13th day, with escalations showing little sign of abating as both sides continue to ramp up attacks on each other using missiles and drones. Iran has particularly targeted energy infrastructure and US embassy offices across the Gulf region, keeping crude oil prices elevated.
The ramped-up attacks by Iran appear aimed at generating enough global economic pressure to push the United States and Israel toward ending the conflict. However, there were no clear signs of de-escalation.
Iran’s new supreme leader, Mojtaba Khamenei, released his first statement on Thursday since succeeding his late father, saying the country would continue attacks on Gulf Arab neighbors and use the Strait of Hormuz as leverage against the United States and Israel.
Tehran has warned the world should brace for $200-a-barrel oil, even as two fuel tankers in Iraqi waters were reportedly set ablaze in attacks.
Earlier, US President Donald Trump said preventing Iran from acquiring nuclear weapons and posing a threat was of greater importance than oil prices.
The rapid rise in energy prices poses a risk to global growth, with economists warning that a prolonged conflict in the Middle East could significantly amplify economic pressures.
Last week, Qatar projected crude oil prices could reach $150 per barrel if the war extends. Iran has effectively taken control of the Strait of Hormuz, through which about one-fifth of global oil trade passes, and has reportedly fired missiles at ships attempting to cross the route.
Strong dollar caps gains in gold and silver
Amid the relentless rise in crude oil prices, the US dollar index has strengthened, rising more than 1.5% against a basket of major currencies, making dollar-priced commodities more expensive for holders of other currencies.
The world’s reserve currency is now close to its highest level since November, partly due to its safe-haven appeal, but also because the United States is a net energy exporter.
Outside the Middle East conflict, traders are also monitoring developments on the tariff front. The Trump administration has launched the first of several trade investigations, setting the stage for new levies to replace those that were struck down.
MCX gold drops; silver also weak
In the domestic market, Multi Commodity Exchange of India (MCX) gold futures fell. ₹1,328 per 10 grams to reach the day’s low of ₹₹1,60,461 per 10 grams.
The yellow metal finished last week down 0.30%, marking its first weekly decline in four weeks. So far this month, prices have fallen marginally by ₹54 per 10 grams.
Silver futures also declined, falling ₹2,317 per kilogram to reach ₹2,66,174. Amid sharp volatility last week, prices closed 5% lower, ending a two-week winning run.
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