Gold and silver prices in India traded sharply lower on Monday, tracking weakness in global bullion markets amid rising concerns over inflation and potential interest rate hikes following escalating US-Iran tensions.

On the Multi Commodity Exchange (MCX), gold futures dropped steeply at the opening. Gold futures (April 2) fell as much as 5.59 per cent, or Rs 8,089, to hit an intra-day low of Rs 1,36,403 per 10 grams by 9:40 am, while silver declined 6.63 per cent, or Rs 15,043, to Rs 2,11,729 per kg.

Silver was later trading at Rs 2,14,745, down Rs 12,027 or 5.3 per cent, while gold was at Rs 1,37,924, lower by Rs 6,568 or 4.5 per cent.

In the international market, bullion prices also extended their decline, with gold falling to a nearly four-month low.

Spot gold slipped 3.80 per cent to $4,320.19 per ounce, its ninth consecutive session of losses, while US gold futures dropped 4 per cent.

Silver prices also weakened globally, with spot silver falling 4.65 per cent to $64.63 per ounce.

Analysts said the sharp correction in precious metals reflects a shift in investor sentiment, as rising geopolitical tensions have heightened inflationary risks and raised expectations of tighter monetary policy globally.

Gold prices had already declined more than 10 per cent last week, indicating sustained selling pressure in global markets.

Market participants will now closely watch further developments in geopolitical tensions and the global interest rate outlook, which are expected to influence bullion prices in the near term.

Meanwhile, crude oil prices surged amid escalating tensions in West Asia, with Brent crude futures rising 0.68 per cent to $112.95 per barrel, while US WTI crude futures traded 3.32 per cent higher at $101.50.

In the currency market, the rupee hit a fresh low of 93.84 against US dollar. Equity benchmarks also opened lower, with Sensex and Nifty declining 2 per cent each.