Gold rates in India crashed on Monday, April 20, tracking a weak broader market due to renewed hostilities at the Strait of Hormuz between the US and Iran. This brings back inflationary fear and energy crisis concerns, making the dollar and crude oil attractive but dulling the appeal for precious metals. On Monday, 24 carat gold plunged by nearly Rs 5,000 per 100 grams and by Rs 500 per 10 grams. This comes after gold saw a bullish trend last week. On the other hand, silver rates remained unchanged for the second day in a row.

Gold rates in India dropped due to decline in spot gold and silver prices despite the celebration of Akshaya Tritiya, a key auspicious festival where precious metals demand is huge. Still, gold plunged by at least Rs 5,000.

The latest sour sentiment is due to fresh round of heated exchange at the Strait of Hormuz. US President Donald Trump confirmed that the US Navy fired and had seized an cargo vessel with an Iranian flag at the Gulf of Oman. This was after the vessel ignored US Navy’s warnings to stop while departing the Hormuz.

This soon after resulted in Iran to target ships and reassert its claim over Hormuz. Tehran has argued that US Navy blockade against Iranian vessels is a breach of ceasefire agreement.