Gold Prices Surge $70 per Ounce, Silver Gains $2.60 Amid Escalating US-Iran Tensions

Global Markets Report - March 05, 2024

Key Highlights

• Gold prices rose by $70 per troy ounce on Comex to $5,204 per ounce, supported by safe-haven buying due to tensions in the Middle East.
• Silver prices pulled back to $83 after reaching an intraday high of $85.75, which was $2.60 higher than the previous close.
• The US dollar index resumed its gains, rising 0.4% to 99.2.

Market Analysis

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

The conflict in the Middle East, which entered its sixth day on March 05, continues to impact global markets. Tensions between the US and Iran have led to a sharp rise in crude oil and gas prices, raising concerns about consumer inflation and interest rate cuts. The closure of the Strait of Hormuz has disrupted crude oil and gas supplies to Asian countries, further exacerbating the situation.

US Economic Data

Investors are awaiting key US economic data releases, including initial jobless claims, unemployment rate, and nonfarm payrolls numbers. These data points will provide crucial cues about the US Federal Reserve's rate-cut outlook.

Domestic Market

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

In the domestic market, the April gold futures contract on MCX jumped by ₹1,617 per 10 grams to a day's high of ₹1,63,142, but prices have cooled off to trade at ₹1,60,677. The May silver futures contract is trading at ₹2,63,644 per kilogram after touching an intraday high of ₹2,75,251.