Gold Prices Surge on Signs of De-escalation in US-Iran Tensions

Gold and Silver Prices Rise Amid Diplomatic Efforts and Conflict Tensions

Market Overview On Wednesday, March 25, COMEX gold rate jumped approximately 4% to $4,600 per ounce, while COMEX silver prices surged 7% to $74.42 per ounce, as investors responded to reports of diplomatic efforts to resolve the conflict with Iran.

Market Drivers The surge in energy prices due to the conflict has heightened inflation risks, prompting investors to anticipate higher interest rates. This has weighed on non-yielding assets like gold. At the same time, declines in global equities and bonds have forced investors to liquidate gold holdings to raise cash, further deepening losses in bullion since the conflict began over three weeks ago.

Central Bank Activity The Central Bank of the Republic of Turkey is reportedly preparing additional measures to stabilise the lira amid war-driven volatility, including potentially utilising its substantial gold reserves. The bank has also discussed possible gold-for-foreign-currency swap arrangements in the London market.

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Market Outlook According to Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities, precious metals are expected to remain highly sensitive to geopolitical headlines, with volatility likely to persist as markets react to further developments in the ongoing conflict. Gold prices are expected to remain within the $4,300–$4,380 range, with resistance at $4,550 and support at $4,100.

Silver Prices Outlook On the silver prices outlook, Ponmudi R, CEO of Enrich Money, stated that the industrial demand is offering limited support, but momentum remains weak. COMEX Silver is holding above $64 after a corrective phase, but continues to trade with a bearish undertone, with resistance at $68–$70 and support at $57–$59.