Gold and silver prices pared earlier gains and turned lower in global trade on Tuesday (March 3), even as geopolitical tensions in the Gulf region continued to underpin safe-haven demand.
On the COMEX, gold was last trading at $5,302.70 per ounce, down $8.90 or 0.17%, after touching a high of $5,394.20 an ounce during the session. Silver saw sharper profit-taking, falling 3.82% to $85.455 per ounce, compared with the previous close of $89.690.
The metal had earlier climbed as high as $91.605 an ounce before retreating.
The pullback comes after a strong rally over the past few sessions, driven by escalating military action involving the United States, Israel and Iran, and fears that tensions around the Strait of Hormuz could disrupt oil supplies and intensify inflation risks.
Why have prices turned lower despite tensions?
Market participants said some investors booked profits after gold touched a more than four-week high in the previous session. While geopolitical uncertainty continues to support bullion, a firm US dollar has capped gains.
The dollar hovered near a multi-week high, making dollar-denominated commodities more expensive for holders of other currencies. During periods of heightened uncertainty, both gold and the dollar can rise together, but currency strength can limit the pace of bullion’s advance.
Silver, which has both precious and industrial demand components, often sees sharper volatility than gold. The nearly 4% decline suggests traders may be reassessing short-term risk exposure after the recent spike.
Strait of Hormuz and inflation concerns
Tensions escalated after Iranian media reported that a senior official from the Islamic Revolutionary Guard Corps warned that the Strait of Hormuz had been closed and that Iran would target ships attempting to pass through the strategic route. The waterway carries roughly a fifth of global oil flows, and any sustained disruption could lift crude prices significantly.
Higher oil prices feed into global inflation expectations, a factor that typically supports gold as a hedge. However, in the near term, positioning and currency movements are influencing price action.
Domestic market trends
In India, domestic bullion futures ended Monday’s (March 2’s) session on a mixed note. Gold futures settled 2.53% higher at ₹1.66 lakh per 10 grams, tracking the earlier global surge. Silver, however, slipped 0.9% to close at ₹2.80 lakh per kilogram.
Trading activity on the Multi Commodity Exchange (MCX) remained curtailed on Tuesday (March 3) due to the Holi 2026 holiday.
For now, bullion markets remain sensitive to developments in the Gulf region, movements in oil prices and fluctuations in the US dollar, with volatility likely to persist in the near term.