The disruption in West Asia has shaken investor sentiment to the core. As a result, a heavy sell-off is being seen across almost every asset class, whether equities, gold, silver, or ETFs. With Israel and Iran targeting energy infrastructure in the Gulf region, the risk of a global slowdown cannot be ruled out. Many global experts have already warned about a possible worldwide recession. In such a situation, several investors have started rapidly pulling money out of risky assets like gold, silver, and equities, and are increasingly giving preference to cash.
Sharp decline in gold and silver
Gold and silver prices saw a steep decline in March 2026, recording their sharpest drop in nearly 45 years. Over the month, both metals fell by more than 20%, entering what is known as a “bear market.” The downward trend has persisted for four consecutive weeks in the international market, with its effects clearly visible in India as well. In the latest dip, silver on MCX slipped 4% to around Rs 2,16,028 per kg, while gold dropped 1.67% to nearly Rs 1,36,940 per 10 grams. Globally too, gold prices declined by about 1.5%, and silver fell roughly 3.3%.
Crude oil becomes expensive
The International Energy Agency has already warned that the ongoing crisis could be more severe than previous conflicts in the Gulf. Due to continuous attacks on energy infrastructure and disruptions in the Strait of Hormuz, oil prices are racing towards USD 150. Crude oil prices have reached their highest level in 44 months. India imports about 85% of its oil requirements, making this a major setback for the country. India’s crude oil basket has already crossed USD 155 per barrel. It is estimated that for every USD 10 increase in crude oil prices, India’s import bill rises by approximately USD 12 billion.
Sell-offs in the share market
In March alone, Indian stock markets have experienced a significant decline. Massive sell-offs by FIIs have resulted in a loss of Rs 48 lakh crore in market capitalization since February. Additionally, profit booking in a single day reached Rs 13.5 lakh crore in March, causing over a 10% drop in the value of the Sensex and Nifty.
Moving towards cash
Taking all these factors together, investors appear to be preparing for a potential global slowdown. As a result, there is a clear shift towards holding cash and liquid assets, which are considered safer during periods of high uncertainty. While even small signs of de-escalation are providing temporary support to equities and precious metals, long-term investment confidence still seems weak. Market participants are likely to remain cautious in the near term, closely tracking geopolitical developments, crude oil movements, and central bank responses before making fresh investment decisions.
