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Rates for gold and silver: On Thursday, March 5, rates for both precious metals increased to 2.5% as the conflict in the Middle East, which is now in its sixth day with no sign of a conclusion, continues to strengthen both precious metals.
Gold and Silver Rates Surge Amid Middle East Conflict
During Thursday’s Asian trading hours, spot silver prices increased as much as 2.5% to $85.12 per ounce, while spot gold rates rose 1% to $5,187 per ounce.
while US and Israeli forces continue their bombings against Iran, investors are fleeing to safer assets while Tehran targets vital energy facilities and retaliates with missile attacks around the area. The ongoing strikes have caused the Strait of Hormuz to close, interfering with the world’s oil supply routes.
Geopolitical Tensions Support Safe Haven Demand
According to reports, the US sank an Iranian warship in international waters, and Donald Trump voiced confidence in the US military action. However, Iran denied that its Ministry of Intelligence had contacted Washington to negotiate a cease-fire as “pure lie.”
As data revealed that the U.S. services sector expanded at its quickest rate since mid-2022 due to robust increase in orders and economic activity, concerns about inflation also partly subsided.
Dollar Index and Federal Reserve Outlook
The US dollar index, which compares the US dollar to a basket of global currencies, fell to 98, increasing the attraction of commodities denominated in dollars to foreign consumers.
Although investors are still accounting for two 25-basis-point rate cuts this year, markets have postponed expectations for the US Federal Reserve’s next rate decrease from July to September.
Analyst View on Gold and Silver Volatility
According to Jateen Trivedi, VP Research Analyst-Commodity and Currency at LKP Securities, the continuous violence in Western Asia and the unsuccessful US-Iran nuclear negotiations, which maintain market uncertainty high, will likely keep gold and silver volatility high.
As CME prices suffered a significant sell-off from $5,400 to $5,000 before regaining support and rising near $5,200, Trivedi observed that gold remained extremely erratic.
Gold Price Forecast and Bullish Momentum
However, when it comes to the forecast for gold prices, Ponmudi R, CEO of Enrich Money, stated that the overall bullish framework is still in place due to strong momentum and persistent breakout continuation from earlier consolidation zones.
Prices are steadily rising and showing increasing bullish momentum as they remain firmly above important moving averages and previous resistance zones close to previous record highs.
“COMEX Gold is presently trading between $5,000 and $5,400, continuing a pattern of rising highs and rising lows. There is still a lot of purchasing demand in the $5,100–$5,200 support range.
The overall bullish trend continues as long as gold stays above the $4,900–$5,000 support range. According to Ponmudi, a persistent breakout over $5,400–$5,600 would pave the way for new record highs.
Silver Price Outlook
He continued by saying that the larger bullish pattern for silver prices is still in place over longer time horizons. Major moving averages have been regained by prices, indicating a shift from correction to fresh strength. There is a lot of purchasing activity near the $76–$80 support range.
“After a robust recovery from recent lows, COMEX Silver is currently trading in the $80–$90 range. A persistent rise above $96–$100 would rekindle interest in the $110–$115 range, possibly retesting earlier highs.
The medium-to-long-term prognosis is still positive despite sporadic volatility, thanks to demand for safe havens and international geopolitical developments, Ponmudi continued.
Disclaimer: This article is for informational purposes only. Commodity investments are subject to market risks. Please consult a financial advisor before making investment decisions.
