Gold and silver prices traded lower on Monday, falling by up to 2 per cent as a stronger US dollar and rising expectations of higher US interest rates outweighed safe-haven demand amid escalating tensions between the US and Iran.

On the Multi Commodity Exchange (MCX), gold futures (August 5) opened at Rs 1,42,633, down Rs 845 or 0.58 per cent from the previous close of Rs 1,43,478.

The yellow metal fell as much as 1.33 per cent or Rs 1,921 to an intraday low of Rs 1,41,557 at around 10 am.

At the last count, MCX gold was trading at Rs 1,42,100, down Rs 1,378 or 0.96 per cent. So far in the session, it has touched an intraday high of Rs 1,42,633.

Meanwhile, silver futures (September 4) declined as much as 2.41 per cent or Rs 5,387 to an intraday low of Rs 2,17,277.

At the last count, the white metal was trading at Rs 2,18,665, down Rs 3,999, or 1.80 per cent. It recorded an intraday high of Rs 2,18,844.

Weakness was also seen in the international market. COMEX gold was down 1.27 per cent at $4,061 per ounce, while COMEX silver fell 0.58 per cent to $58 per ounce.

According to market experts, gold prices remained under pressure as a stronger US dollar and renewed geopolitical tensions in the Middle East heightened concerns over persistent inflation and the possibility of higher US interest rates.

Fresh US military strikes on Iran and retaliatory actions by Tehran pushed crude oil prices higher, reviving fears of energy-driven inflation, they said.

Elevated US Treasury yields and a firm dollar also reduced the appeal of non-yielding assets such as gold, they added.

Going ahead, investors will closely monitor developments in the US-Iran conflict, upcoming US economic data and commentary from the US Federal Reserve for cues on interest rates and the near-term direction of gold prices, according to market experts.

Meanwhile, the Dollar Index rose to 100.90. The index measures the value of the US dollar against a basket of six major currencies -- the euro, Japanese yen, British pound sterling, Canadian dollar, Swedish krona and Swiss franc.

Additionally, Iran has adopted an aggressive stance following the strikes, targeting US military bases in Kuwait, Bahrain and Jordan.