US-Iran-Israel Tensions Forecast to Boost Gold and Silver Prices, Prompting Investors to Reassess Holdings

Gold and Silver Prices Volatile Amid US-Israel and Iran Conflict Escalation

Key Takeaways

• The US-Israel and Iran conflict escalation has sparked investor interest, with analysts estimating a gap-up opening for bullion markets on Monday, March 2.
• International spot prices of gold and silver on Friday, February 28 closed higher on Comex, while futures prices dipped marginally on the domestic stock exchange.
• MCX closed the domestic futures session of gold with a 0.08% decline at Rs 1,61,971 per 10 grams, and silver at 0.23% with Rs 2,81,990 per kilogram.

Market Outlook

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The increasing geopolitical risk has driven investors toward traditional safe-haven assets like gold and silver. Gold prices are up 1.97% at $5,296.40 per ounce, and silver prices are up 7.85% at $93.82 per ounce. Analysts estimate gold prices to touch Rs 1.70 lakh per 10 grams and silver at Rs 3 lakh per kilogram in the short term.

Factors Driving Bullion Demand

The conflict escalation has increased the risk of further supply disruptions in key routes like the Strait of Hormuz, driving up crude oil prices and supporting bullion interest. The slowdown in US GDP growth and upcoming weekly jobless claims data also support expectations of potential Federal Reserve rate cuts, further driving gold and silver prices.

Price Projections

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Analysts estimate gold prices to reach near their January highs, with gold surging past $5,500 per ounce on January 29 and silver peaking above Rs 4 lakh per kilogram. However, profit-taking may occur if diplomatic developments or de-escalation indications emerge over the weekend.