US-Iran-Israel war tensions spark bullish outlook for gold and silver

Israel Iran War: Impact on gold and silver prices

• Gold and silver prices rise amid Iran-Israel-US tensions
• Analysts expect volatile trading as markets open Monday
• Safe-haven demand and US data support precious metals prices

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Gold and silver prices are gearing to reach near their January highs, bolstered by geopolitical events, especially the escalation between Iran on one side, and Israel and the US joining forces on the other, to the point of exchanging missile attacks.

Reports, citing strategic analysts, pinned the focus to Iran’s nuclear programme, with both US and Israeli leaders confronting Iran’s expanding military and nuclear capabilities, which boosted the risk premium in precious metals. The move follows Washington’s renewed pressure on Iran through fresh sanctions.

Precious metals prices, particularly gold and silver, react quickly to geopolitical developments that drive safe-haven buying. Analysts expect a frenetic session when the market opens on Monday.

According to Vandana Bharti, AVP, Commodity Research at SMC Global Securities, MCX futures gold can touch Rs 1.70 lakh per 10 grams of 24-carat purity, and silver at Rs 3 lakh in the short term.

On Comex, spot silver was up 7.85 per cent to 93.82 per ounce, and gold at $5,296 per ounce, as of February 28 (9:33 am GMT). On Friday, gold closed the MCX session 0.08 percent lower at Rs 1,61,971 per 10 grams, and silver 0.23 percent at Rs 2,81,990 per kilogram, driven by profit-booking following the recent surge.

Where are gold, silver prices headed?

Bharti reasons that 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

“In the short term, prices often spike as headlines break and traders rush to hedge risk. Over time, however, markets settle, and prices may pull back if tensions ease. So the impact is often sharp and emotional at first, driven by fear and protection, before fundamentals and broader economic factors take back control,” said Bharti.

Gold reached its peak performance on January 29, when prices crossed $5,500 per ounce for the first time, while silver surged past Rs 4 lakh per kilogram. The prices of precious metals then dipped sharply starting in February and entered a correction.

On February 24, silver rose to a three-week high after the US court ruling on global tariffs at 10 percent, though White House signalled plans to formally raise the rate to 15 percent. Besides geopolitical and safe-haven demand, gold prices remain supportive following a decline in US GDP growth, increasing the likelihood of Fed rate cuts as investors await weekly jobless claims data, keeping the metal's premium elevated.