US-Iran Tensions Escalate: Potential Impact on Indian Stock Market and Precious Metals Prices

US-Iran War Escalation: Market Implications

June 22, 2025

The ongoing conflict between the US and Iran has escalated, with Israel attacking Iran on Saturday and a US attack underway. This has plunged the Middle East into a renewed military confrontation and further dimmed hopes for a diplomatic solution to Tehran's nuclear dispute with the West.

Market Reaction

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

The US military has initiated a series of strikes against targets in Iran, with the scope of the air and sea operations not immediately clear. Iran is preparing a crushing retaliation, according to an Iranian official. The escalation in the US-Iran war buzz is expected to have a negative impact on the global markets, including India's Dalal Street.

Indian Stock Market Outlook

The Indian stock market is expected to react to the escalation in the US-Iran war buzz. Stock market experts anticipate weak trends in the Indian stock market, with a possibility of a gap-down opening, but not as deep as the previous day. Avinash Gorakshkar, a SEBI-registered fundamental equity analyst, expects weak trends on Dalal Street on Monday due to the boost in bears' sentiment.

Nifty 50 Index

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

The Nifty 50 index has closed below the 200-day EMA, indicating a weakening medium-term trend and a shift in the overall market structure toward bearishness. Sumeet Bagadia, Executive Director at Choice Broking, expects the Nifty 50 index to face resistance in the 25,300–25,350 zone and support in the 25,000–25,050 zone.

Gold and Silver Rates

The escalation in the US-Iran war buzz is expected to fuel uncertainty, leading investors to look at gold and silver as a safe-haven asset. Anuj Gupta, a SEBI-registered market expert, expects a gap-up opening for precious metals. The COMEX gold rate is facing a hurdle at $5,300/oz, and breaking above this resistance may lead to gold rates in India touching ₹1,68,000 to ₹1,70,000 per 10 gm. The COMEX silver rate is facing a hurdle at $95/oz, and breaking above this resistance may lead to the spot silver price regaining the $100 per ounce mark, with the silver rate in India touching ₹3,00,000 per kg.