Gold Plummets Below 1.53 Lakh Amid Escalating Middle East Hostilities

Mumbai : In a surprising turn for commodity markets, gold prices recorded a massive single-session plunge on Monday, slipping below the critical threshold of ₹1.53 lakh per 10 grams on the Multi Commodity Exchange (MCX).

This sharp decline materialized rapidly even as geopolitical volatility flared up dramatically over the weekend, following a direct exchange of heavy missile strikes between Israel and Iran in the Middle East.  On the MCX, gold futures contracts for August delivery crashed by over 1.5 percent, sliding down to trade at ₹1,53,220 per 10 grams during a high-turnover trading session.

Similarly, spot prices for 24-karat bullion in major Indian retail hubs mirrored this steep contraction, registering a significant per-gram drop compared to the previous week's closing benchmarks.  Market analysts highlighted that while intensifying military conflicts typically drive immediate safe-haven inflows into precious metals, opposing economic indicators muted gold's traditional appeal this time.

The military escalation—which included strikes on energy facilities—triggered a simultaneous 4.8 percent spike in global Brent crude oil prices, pushing past 97 dollars per barrel. The sudden surge in energy costs drastically amplified global inflation anxieties. Concurrently, stronger-than-expected employment data out of the United States heavily reinforced expectations that central banks will maintain a tighter monetary policy with higher interest rates for a longer duration.  

Faced with a strengthening US dollar and rising bond yields, institutional investors aggressively unwound long positions in gold to cover risks elsewhere. Traders are increasingly prioritizing liquid assets as high crude prices alter interest rate projections, dampening bullion’s momentum. While regional tensions remain extremely acute near the strategic Strait of Hormuz, local market experts suggest that short-term domestic bullion pricing will continue navigating a complex tug-of-war between high-interest-rate anxieties and physical asset demand.