Mumbai: Precious metals – last year’s investor darlings – are losing their sheen with the sell-off since the start of the West Asia conflict, eroding most of the gains in gold and pushing silver into losses in 2026. A turn in the strengthening dollar could, however, open a window for investors betting on a rebound.

Gold has dropped 16%, and silver declined 26% since February 27, when the West Asia conflict began. After this fall, gold is up around 1%, and silver is down around 5% for 2026.

“Bullion prices are under pressure due to panic selling and fresh short positions. Investors are exiting in response to falling prices,” said Navneet Damani, head of research – commodities and currencies at Motilal Oswal Financial Services.

From its record high of $5595 an ounce, gold has fallen 21% to $4,400 on Tuesday. Silver has fallen 43% to $69.3, its lifetime high of $121.7. Both metals hit their peaks in January after the record rally in 2025 that saw gold jump 64% and silver soar almost 150%.

“The 100-150% surge in energy prices due to the West Asia conflict has lifted dollar demand, triggering a sell-off in bullion,” said Anindya Banerjee, head of commodity and currency research at Kotak Securities.

A stronger dollar typically weighs on gold as it raises the appeal of yield-bearing assets such as the US Treasury. “Both retail and institutional investors are booking profits, as a further rise in the dollar could keep pressure on bullion prices,” said Naveen Mathur, director -commodities and currencies at Anand Rathi Shares & Stock Brokers.

To buy or not to buy?
Banerjee expects the end of the conflict to ease the demand for dollars and spark a rebound in gold and silver. “We see gold moving towards $5,600 and silver crossing $100 within 1-2 years, making current dips an attractive entry point,” he said.
Damani said investors may consider accumulating gold in the $4,100-4,200 range and silver near $60, with potential upside to $5,500 and $90-95, respectively, once geopolitical tensions ease.