Escalating Middle East tensions are driving investors to safe-haven assets, causing gold and silver prices to skyrocket in India and globally.
Photograph: Arnd Wiegmann/Reuters
Key Points
- Silver prices in India surged to Rs 3 lakh per kg, and gold neared Rs 1.73 lakh per 10 grams due to increased Middle East tensions.
- Geopolitical instability, including strikes in Iran, drove investors towards safe-haven assets like gold and silver.
- International spot gold prices climbed to around $5,400 per ounce, reaching a two-month high.
- Retaliatory strikes by Iran targeting US assets heightened concerns about regional stability and global trade routes.
- Upcoming US economic data releases are expected to introduce further volatility into precious metal prices.
Precious metal prices skyrocketed up to 12 per cent in the national capital on Monday, with silver surging to Rs 3 lakh per kilogram, while gold nearing Rs 1.73 lakh per 10 grams as investors flocked to safe-haven assets following an escalation of hostilities in the Middle East.
According to the All India Sarafa Association, the white metal surged by Rs 32,000, or 11.94 per cent, to Rs 3,00,000 per kg (inclusive of all taxes) from Friday’s closing level of Rs 2,68,000 per kg.
In the bullion market, price of gold of 99.9 per cent purity climbed Rs 8,100, or 4.92 per cent, to Rs 1,72,800 per 10 grams (inclusive of all taxes). It had settled at Rs 1,64,700 per 10 grams in the previous market session.
Market Analysis and Expert Opinions
“Gold and silver prices witnessed a sharp surge on Monday, as rising geopolitical tensions in the Middle East triggered aggressive safe-haven buying.
“The escalation followed coordinated military strikes by the United States and Israel on Iran over the weekend, resulting in the death of Supreme Leader Ayatollah Ali Khamenei, rattling global financial markets and prompting a swift shift towards bullion,” Gaurav Garg, Research Analyst at Lemonn Markets Desk, said.
In the international market, spot gold gained $116.38, or 2.21 per cent to $5,394.28 per ounce, while silver was trading 1.43 per cent higher at $95.19 per ounce.
“Spot gold rallied more than 2 per cent on Monday, climbing around the $5,400 per ounce mark to reach its highest level in two months, as a sharp escalation in Middle East tensions fuelled strong safe-haven demand,” Saumil Gandhi, Senior Analyst – Commodities at HDFC Securities, said.
Impact of Retaliatory Strikes
Meanwhile, Iran launched retaliatory strikes targeting US military and strategic assets across several neighbouring countries, including the UAE, Bahrain, Kuwait, Qatar, Saudi Arabia, Jordan, Iraq, and Syria.
Gandhi said the widening geographic scope of the conflict has raised concerns about potential disruptions to regional stability, energy infrastructure, and key global trade routes.
“The escalation has triggered a broad risk-off move across global financial markets, with equities facing pressure and investors rotating capital towards traditional defensive assets such as gold,” he added.
Future Market Volatility
Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities, said “the week ahead remains data-heavy for the US, with manufacturing and non-manufacturing PMI, ADP non-farm employment change and unemployment data lined up.”
The data releases could inject further volatility into prices as participants reassess Federal Reserve’s policy expectations, he added.
