We theoretically analyze the effect of density/refractive-index gradients on the measurement precision of Volumetric Particle Tracking Velocimetry (V-PTV) and Background Oriented Schlieren (BOS) experiments by deriving the Cramer-Rao lower bound (CRLB) for the 2D centroid estimation process. A model is derived for the diffraction limited image of a particle or dot viewed through a medium containing density gradients that includes the effect of various experimental parameters such as the particle depth, viewing direction and f-number. Using the model we show that non-linearities in the density gradient field lead to blurring of the particle/dot image. This blurring amplifies the effect of image noise on the centroid estimation process, leading to an increase in the CRLB and a decrease in the measurement precision. The ratio of position uncertainties of a dot in the reference and gradient images is a function of the ratio of the dot diameters and dot intensities. We term this parameter the Amplification Ratio (AR), and we propose a methodology for estimating the position uncertainties in tracking-based BOS measurements. The theoretical predictions of the particle/dot position estimation variance from the CRLB are compared to ray tracing simulations with good agreement. The uncertainty amplification is also demonstrated on experimental BOS images of flow induced by a spark discharge, where we show that regions of high amplification ratio correspond to regions of density gradients. This analysis elucidates the dependence of the position error on density and refractive-index gradient induced distortion parameters, provides a methodology for accounting its effect on uncertainty quantification and provides a framework for optimizing experiment design.