Middle East Crisis: Silver Hits ₹3 Lakh, Gold Surges to ₹1.72 Lakh

The escalating geopolitical crisis in West Asia has triggered a massive surge in the demand for gold and silver as safe-haven assets. On Monday, bullion markets across India, from the national capital Delhi to the financial hub Mumbai, recorded historic price hikes. The growing military tensions involving Iran, Israel, and the United States have prompted global investors to shift away from riskier assets toward the safety of precious metals. Consequently, silver prices in the domestic market touched the ₹3,00,000 per kilogram mark for the first time, while gold prices also saw a significant jump.

Historic Price Levels in Delhi Bullion Market

According to data released by the All-India Bullion Association, silver prices in the Delhi bullion market witnessed an unprecedented rally on Monday. 94% from Friday's closing level of ₹2,68,000 per kg to reach ₹3,00,000 per kg (inclusive of all taxes). 92% to reach ₹1,72,800 per 10 grams. In the previous trading session, it had closed at ₹1,64,700 per 10 grams. Market analysts attribute this sharp rise to aggressive safe-haven buying following coordinated military strikes in the region over the weekend.

Precious Metals Performance in International Markets

The bullish trend for gold and silver remains strong in the international markets as well. 21%. 19 per ounce. Saumil Gandhi, Senior Analyst (Commodities) at HDFC Securities, noted that spot gold prices climbed by over 2% on Monday, nearing their highest levels in two months. The heightened demand is a direct result of concerns over regional stability and potential disruptions to global trade routes and energy infrastructure due to the conflict.

Volatility on the Multi Commodity Exchange (MCX)

The domestic futures market, Multi Commodity Exchange (MCX), experienced significant volatility during Monday's trading session. Gold futures closed at ₹1,66,074, marking a gain of ₹3,970. During the intraday session, gold prices had spiked by as much as ₹7,776 to reach a high of ₹1,69,880. On the other hand, silver futures showed a contrasting trend by the end of the day, while while silver prices had risen by ₹15,155 during the session, they eventually closed with a decline of ₹4,163 at ₹2,78,481 per kg due to late-session profit booking by traders.

Geopolitical Conflict and Regional Instability

The primary driver behind this market turbulence is the intensifying military conflict in West Asia. Reports indicate that Iran has launched retaliatory strikes targeting US military and strategic assets across several neighboring countries, including the UAE, Bahrain, Kuwait, Qatar, Saudi Arabia, Jordan, Iraq, and Syria, while these actions followed coordinated military strikes by the US and Israel on Iran, which reportedly resulted in the death of Iran's Supreme Leader Ayatollah Ali Khamenei. The expanding geographical scope of the conflict has raised alarms regarding the security of key global trade corridors and energy supplies.

Upcoming Economic Indicators and Market Sensitivity

In the coming days, gold and silver prices are expected to be influenced by critical economic data from the United States. According to Jatin Trivedi, VP Research (Commodity & Currency) at LKP Securities, the upcoming week is data-heavy for the US, featuring Manufacturing and Non-Manufacturing PMI, ADP Non-Farm Employment Change, and unemployment figures. These data points will be crucial for market participants as they reassess the Federal Reserve's policy expectations. While geopolitical tensions currently dominate market sentiment, these economic indicators could introduce further volatility in currency and commodity valuations.