US-Iran-Israel Conflict Escalation Fuels Optimism for Gold and Silver Prices

Precious Metals Prices Poised to Reach Near January Highs

Gold and silver prices are expected to surge in the coming days, driven by geopolitical tensions, particularly the escalating conflict between Iran, Israel, and the US. The heightened risk premium in precious metals has been fueled by the US and Israeli leaders' confrontation of Iran's expanding military and nuclear capabilities.

Analysts expect a volatile market session on Monday, with gold and silver prices reacting quickly to geopolitical developments that drive safe-haven buying. 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.

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

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Gold tends to rise quickly as a store of value when the world feels unstable, with silver following, although its moves can be more volatile due to both investment and industrial demand. In the short term, prices often spike as headlines break and traders rush to hedge risk, but over time, markets settle, and prices may pull back if tensions ease.

Key drivers of the price surge include:

• Geopolitical tensions between Iran, Israel, and the US
• US court ruling on global tariffs
• Decline in US GDP growth, increasing the likelihood of Fed rate cuts
• Safe-haven demand for precious metals

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.

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