Silver Price in India May Rise Amid US-Iran Tensions: ₹3 Lakh Target in Sight this Week

Silver Price Surge Expected Amid Geopolitical Tensions

Silver prices have kicked off the week with strong momentum, driven by escalating tensions between the United States and Iran. The situation has led to investors seeking traditional safe-haven assets, causing spot silver to rise 1.4% to $90.67 per ounce on Tuesday.

The rally comes amid coordinated military strikes by the US and Israel on Iran over the weekend, followed by Iranian retaliation across several Gulf nations. The Strait of Hormuz, a key oil transit route handling nearly one-fifth of global crude flows, has been closed by Iran's Islamic Revolutionary Guard Corps (IRGC). Iranian officials have warned that any ship attempting to pass through the strategic waterway would be targeted.

This sharp escalation has injected a fresh geopolitical risk premium into commodities, particularly precious metals. The US dollar has also been supported by safe-haven demand and cautious investor sentiment, hovering near a more than five-week high.

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Silver is being supported by deeper structural drivers, including a persistent multi-year supply deficit and strong industrial demand from electric vehicles, AI infrastructure, and solar energy. The current rally is not purely war-driven, but rather underpinned by a combination of factors, including a persistent multi-year supply deficit, strong industrial demand, renewed investment inflows, and geopolitical risk premiums.

Renisha Chainani, Head – Research at Augmont, highlighted that the current rally is setting up a potential extension toward fresh highs. Two emerging developments could further tighten global supply: China's accelerated post-Lunar New Year restocking of silver and copper, and potential disruptions in Mexico's silver production due to cartel-related violence.

From a technical standpoint, silver has delivered a major breakout, confirming a breakout above the important $95 resistance level. Strong support is now established at $85, and as long as prices hold above this zone, the bullish outlook remains intact.

NS Ramaswamy, Head of Commodity & CRM Ventura, stated that Silver is heading into another year of structural deficit, entering its eighth deficit year with inventories at an all-time low and investment demand showing no signs of abating. He predicts that if Silver sustains above $98, it would activate the momentum zone of $100-$105 range, with the metal expected to surpass ₹3,10,000 by the weekend.

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