On July 13, gold and silver prices in India saw a sharp decline. MCX gold August futures declined over 1% to Rs.1,41,820 per 10 grams, while MCX silver September futures crashed more than 2% to Rs.2,17,448 per kg in early deals after crude oil prices jumped 4%, driving the dollar index higher.

U.S. Central Command (CENTCOM) announced strikes against Iran on 12 July, hitting dozens of targets at multiple locations with precision munitions to “degrade Iran’s ability to continue attacking international shipping flowing through the Strait of Hormuz. Crude oil prices jumped 4%, reviving inflationary fears and expectations of aggressive monetary tightening by the US Federal Reserve and other major central banks globally.

Gold is considered a hedge against inflation, but it tends to decline during periods of monetary tightening because it is a non-yielding asset. Along with the Middle East conflict, investors’ focus this week will be on the Federal Reserve Chairman Kevin Warsh’s first semiannual testimony before Congress, as well as June CPI, PPI and retail sales data, which will provide fresh clues on the US economy and the monetary policy outlook.

Experts expect gold and silver prices to remain volatile this week due to volatility in crude oil prices and the dollar index, geopolitical tensions, and caution ahead of U.S. inflation data.