US-Iran-Israel tensions expected to lift gold and silver; should investors book profit?

• Gold and silver prices surge amid US-Israel and Iran conflict
• Analysts expect gap-up opening and high volatility on Monday
• Safe-haven demand rises as geopolitical tensions escalate

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The US-Israel and Iran war escalation has already sparked investors’ attention, with analysts estimating a gap-up opening on Monday (March 2) for bullion markets.

The international spot prices of gold and silver on Friday closed higher on Comex, while the metals’ futures prices dipped marginally on the domestic stock exchange.

MCX closed the domestic futures session of gold with a 0.08 percent decline at Rs 1,61,971 per 10 grams, and silver 0.23 percent at Rs 2,81,990 per kilogram. The international price of silver closed 7.85 percent higher to $93.82 per ounce, and gold was up 1.97 percent at $5,296.40 per ounce.

“Gold and silver prices are set to remain highly volatile with a gap up on the opening session on Monday,” said Jateen Trivedi, VP Research Analyst (Commodity and Currency) at LKP Securities, an online brokerage firm.

“As global equities and risk assets come under pressure, capital tends to shift into precious metals, which act as a hedge against uncertainty. This elevated geopolitical risk can drive investors toward traditional safe-haven assets like gold and silver,” said Trivedi.

Gold and silver price outlook in the near term

The US and Israeli forces on Friday organised a joint strike on Iran, and Iran responded with missile and drone attacks on US bases. Reports are rife that Iran’s Supreme Leader have been eliminated during the strike, citing Iranian state media as officially confirming.

This has increased the risk of further escalation, which would boost risk premiums in gold prices, with analysts estimating gold prices to touch Rs 1.70 lakh per 10 grams, and silver at Rs 3 lakh per kilogram in the short term.

Even energy markets are responding negatively, with crude oil prices rising on fears of supply disruption through key routes like the Strait of Hormuz, which further adds to risk-off sentiment and supports bullion interest

“However, the impact may not be uniform — if over the weekend there are diplomatic developments or indications of de-escalation, precious metals could see profit-taking after an initial spike of 3-6 percent," said Trivedi.

Will gold and silver prices reach near their January highs?

Earlier moves have already pushed gold and silver prices higher in recent sessions, and this momentum could continue if the conflict intensifies further.

Gold surged past $5,500 per ounce for the first time on January 29, while silver peaked above Rs 4 lakh per kilogram. The February session saw precious metals’ prices dip sharply and enter a correction.

Gold and silver prices extended their gains on February 26, hovering near a four-week high as safe-haven demand strengthened amid rising geopolitical tensions and continued uncertainty around US trade policy.

According to Vandana Bharti, AVP, Commodity Research at SMC Global Securities, “Gold tends to rise quickly as it is seen as a store of value when the world feels unstable. Silver follows, though its moves can be a bit more volatile because it has both investment and industrial demand.”

Beyond geopolitical tensions and safe-haven buying, gold and silver prices continue to find support after a slowdown in US GDP growth and ahead of the upcoming weekly jobless claims data, which could strengthen expectations of potential Federal Reserve rate cuts.