Gold Fell Nearly 5% Today — Here Is Why War Is No Longer Saving It
MCX Gold Futures fell 4.91 percent on Monday morning, shedding ₹7,088 per 10 grams to trade at ₹1,37,404 per DAG as of 9:06 AM IST. Globally, gold dropped below $4,400 per ounce, extending a selloff that has now run for four consecutive weeks and wiped out more than 10 percent of the metal’s value in the past week alone.
The timing is jarring. The Iran conflict is intensifying, not easing. US President Donald Trump has threatened strikes on Iranian power plants if the Strait of Hormuz is not reopened. Tehran has warned it will target key American and Israeli assets across the region if its energy infrastructure is hit. By the conventional logic of markets, this is exactly the environment in which gold is supposed to surge. Instead, it is falling sharply. The reason is the same mechanism currently destroying silver: the war’s second-order effect on interest rates is overpowering its first-order effect on safe haven demand.
Sustained oil prices at historic highs have forced every major central bank to reconsider its rate path. Last week, the Federal Reserve, European Central Bank, Bank of England, and Bank of Japan all held rates steady while signalling readiness to tighten further if inflationary pressures persist. Traders are now pricing in a possible Fed rate hike toward year-end. That shift in expectations is lethal for gold. The metal pays no yield. When the opportunity cost of holding it rises — because competing assets offer higher returns — money exits gold systematically.
There is a secondary pressure working against gold specifically: the possibility that major economies, facing fiscal stress from the war’s economic fallout, may need to boost liquidity partly through gold reserve sales. Even the expectation of that dynamic creates selling pressure.
For Indian investors, the MCX price carries a partial rupee cushion — the weaker rupee at 93.25 to the dollar softens the global dollar decline in rupee terms — but Monday’s nearly 5 percent fall shows that cushion has limits when the global selloff is this aggressive.
Gold’s near-term direction depends on whether the Iran conflict resolves before central banks are forced to act on their rate hike signals. Until that clarity arrives, the metal that Indians have trusted for generations as a crisis hedge is caught in a trap of its own safe haven narrative’s making.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial or investment advice. MCX Gold data referenced is as of March 23, 2026 at 09:06 IST.