Gold and Silver Prices Rise as US–Iran Tensions Lift Safe Haven Demand

Gold and Silver Prices Rise as US–Iran Tensions Lift Safe Haven Demand​

Gold and silver prices advanced on Thursday as intensifying geopolitical tensions in the Middle East and currency movements influenced global bullion markets. The rally reflects renewed safe haven demand alongside broader macroeconomic factors shaping volatility in precious metals.

Gold Prices Climb as Dollar Eases​

Spot gold rose 0.8 percent to $5,176.69 per ounce in early trade, while US gold futures for April delivery gained 1 percent to $5,186.

The US dollar edged lower, making dollar denominated gold more affordable for investors holding other currencies. The softer greenback provided additional support to bullion prices.

Escalation in US–Iran Conflict Sparks Market Jitters​

The gains followed a sharp escalation in tensions between the United States and Iran. Reports indicated that a US submarine sank an Iranian warship off Sri Lanka, while NATO air defenses intercepted a ballistic missile fired towards Turkey.

The developments have heightened fears of a broader regional conflict and possible disruption to oil flows through the Strait of Hormuz, a key global energy corridor. Rising geopolitical uncertainty has reinforced gold’s role as a traditional safe haven asset.

Bullion has surged nearly 20 percent so far this year and has repeatedly hit record highs amid persistent political and economic instability.

India Bullion Market Mirrors Global Strength​

In India, gold traded above ₹1.63 lakh per 10 grams on Wednesday, with spot prices reaching around ₹1.70 lakh. Silver climbed 2.81 percent during the session.

Aamir Makda, Commodity and Currency Analyst at Choice Broking, described the move as a classic flight to safety response. He said that with intensifying US–Iran hostilities, investors are focusing on wealth preservation rather than speculative gains. Indian equity markets have declined more than 3 percent this week, further increasing safe haven risk premiums in bullion. He expects a moderately bullish trend in the near term.

Analysts See Divergence Between Gold and Silver​

Hareesh V, Head of Commodity Research at Geojit Investments Limited, maintained a positive outlook for gold, citing continued geopolitical tensions and supportive fundamentals. He said gold is likely to extend gains, while silver may witness volatile trading as speculative transactions dominate. Overall, he sees gold outperforming, with silver showing a mild positive bias.

Federal Reserve Policy and Yields in Focus​

Investors are also monitoring signals from US monetary policy. US President Donald Trump has nominated former Federal Reserve Governor Kevin Warsh as the next chair of the central bank.

Markets, however, widely expect the Federal Reserve to keep interest rates unchanged at its March 18 meeting.

NS Ramaswamy, Head of Commodity and CRM at Ventura, described the current gold trade as a tug of war between safe haven demand and macroeconomic headwinds. He noted that while geopolitical fears are supporting gold, rising crude oil prices due to supply concerns could stoke inflation and push real yields higher. Higher real yields typically weigh on non yielding assets such as gold.

At the same time, elevated US fiscal deficits and ongoing central bank reserve accumulation continue to offer structural support to bullion prices.

Ramaswamy added that investors should closely track movements in US 10 year bond yields and the dollar index, as both remain critical indicators for the near term direction of gold and silver prices.