The increasing military tension between Iran, America and Israel has shaken the markets all over the world. Usually, during such a crisis, investors consider gold and silver as safe investments and increase their purchases, which leads to a rise in prices. But this time the market trend appears to be opposite. Despite the war, the prices of gold and silver did not rise as expected, rather they have been under pressure in recent times. Investors are surprised by this and are trying to understand the movements of the market.
Big fall in silver
There has been a sharp fall in silver prices in recent sessions in the commodity market. Since the beginning of the conflict on Multi Commodity Exchange (MCX), the price of silver has fallen by about Rs 14,000 i.e. about 5 percent. There has also been weakness in gold prices. Usually, precious metals rise during geopolitical tensions, but this time the market movement seems to be different.
Impact of risk-off environment
According to experts, war and rising prices of crude oil have created an environment of uncertainty in the market. At such times, many investors start raising cash to reduce their risk. For this, they also sell the assets like gold and silver present in their portfolio. This is the reason why selling pressure on these metals has increased in a short time.
Strong dollar becomes another reason
The strength of the US dollar has also had an impact on gold prices. When uncertainty increases in the world, investors often turn to safe alternatives like the dollar and US Treasuries. This strengthens the dollar. Since the price of gold is fixed in dollars, a stronger dollar makes gold more expensive for buyers in other countries and demand may decrease.
Profit booking also became the reason
Experts also believe that profit-booking also has a big role to play in the recent decline. Gold prices had already increased significantly last year and at the beginning of this year. In such a situation, when market fluctuations increased, many investors started selling gold and silver to secure their profits.
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