Gold and Silver Prices Drop Over 7% Amid Geopolitical Tensions

On 23 March 2026, gold and silver prices in India experienced a significant decline, each dropping more than 7% amid ongoing tensions in West Asia, inflation concerns, and a strengthening United States dollar.
Gold prices fell sharply during the trading session, starting at ₹1,40,158 before decreasing to ₹1,29,595, marking a steep decline. Silver prices followed suit, decreasing from a high of over ₹2,09,797 per kilogram to a low of ₹1,99,643, highlighting market volatility.
Market analysts attribute this decline to several interrelated factors. Colin Shah, Managing Director of Kama Jewellery, suggested that the ongoing geopolitical tensions have disrupted oil supplies, leading to a rise in crude oil prices. Such inflationary pressures are likely to make central banks more cautious, resulting in anticipated increases in interest rates.
Shah noted, “The disrupted oil supply has led to a rise in the price of crude, which is being perceived as a major inflationary trigger, along with which will drive cautiousness among the central banks. As a result, interest rates are expected to rise and directly impact domestic consumption.”
Additionally, Manav Modi, a commodities analyst at Motilal Oswal Financial Services, indicated that gold prices are facing downward pressure due to heightened inflation concerns and the expectation of increased interest rates. Modi pointed to escalating geopolitical tensions, particularly the ongoing conflicts involving the United States and Israel with Iran, as factors intensifying fears of prolonged disruptions in global energy supplies.
He stated that markets now believe sustained high oil prices could compel central banks to adopt a more aggressive monetary policy stance, which would diminish the attractiveness of non-yielding assets like gold.
The current market environment demonstrates a marked shift in expectations regarding interest rates, with investors moving from anticipating multiple rate cuts to now factoring in the possibility of a pause or even a rate hike.
Overall, the considerable decline in precious metal prices underscores the significant influence of global economic conditions, rising interest rate expectations, and geopolitical tensions on investor behaviour.
As the situation continues to evolve, analysts will closely monitor how these factors impact the precious metals market in the coming weeks.