Geopolitical Tensions Drive Up Commodity Prices

Market Overview

The recent joint attack by the US and Israel on Iran has heightened geopolitical risks, contributing to a surge in commodity prices, including crude oil, gold, and silver. The US-Iran conflict has triggered a sharp increase in gold futures, with $5,267.20 per troy ounce for April delivery on Friday, a 1% jump. This marks the eighth consecutive month of rising gold prices, with a 11% increase in February.

Silver Prices Soar

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Silver futures for May surged 6.5% to $93.64 per troy ounce on Friday, with a monthly gain of over 18% in February, marking the 10th consecutive month of gains. On the MCX, gold's April futures contract settled at ₹1,62,104 per 10 grams, rising 1.50%, while silver's May futures contract settled at ₹2,82,644 per kilogram, gaining 5.48%.

Experts' Views

Experts predict that gold and silver prices may see a sharp upward movement amid rising geopolitical uncertainty. Historically, major conflicts have triggered strong safe-haven flows, and if the current situation broadens across the Middle East, bullion may gain significant momentum.

Price Projections

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• COMEX gold may rise to $5,500 per troy ounce in case of the escalation of the US-Israel-led attack on Iran.
• COMEX silver is expected to experience a positive undertone, with $100 per troy ounce as the next resistance for the week.
• MCX gold may approach ₹2 lakh per 10 grams in an extreme scenario, requiring a combination of $6,000+ global prices, a weaker rupee, and elevated domestic premiums.

Key Takeaways

• Elevated volatility and risk aversion are likely to keep investor sentiment supportive for gold in the near term.
• The US-Iran conflict adds another layer of risk premium, especially if it disrupts oil flows or widens into a prolonged regional confrontation.
• Central bank buying remains strong, real rates are gradually softening, and global diversification away from the dollar continues, structurally supporting gold's rally.