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Due of tensions between the US and Iran, the price of gold and silver increased on March 5. US gold futures rose 1% to $5,186 per ounce, while spot gold rose 0.8% to $5,176.69 per ounce.
Gold and Silver Prices Rise Amid US-Iran Tensions
As currency fluctuations and growing geopolitical tensions in the Middle East influenced global bullion trading, gold and silver prices rose on Thursday, March 5. Analysts noted that a combination of macroeconomic cross-currents and safe-haven demand was causing volatility.
US gold futures for April delivery increased 1% to $5,186, while spot gold increased 0.8% to $5,176.69 per ounce in early trading. Due to the US dollar’s slight decline, holders of foreign currencies saw gold denominated in dollars to be more affordable, supporting prices.
Escalation in the Middle East
Following reports that a US submarine sank an Iranian warship off Sri Lanka and that NATO air defenses intercepted a ballistic missile fired at Turkey, the US-Iran crisis sharply widened. Concerns about a wider regional confrontation and potential disruption to oil flows via the Strait of Hormuz have increased as a result of the escalation.
Traditionally seen as a safe-haven investment, bullion has increased by almost 20% this year and has frequently reached all-time highs in the face of political and economic unpredictability. The general prognosis for gold is still favorable, according to Hareesh V, Head of Commodity Research at Geojit Investments Limited, because of persistent geopolitical concerns and favorable fundamentals.
📈 Bullion Market Highlights
- US Gold Futures: $5,186 per ounce
- Spot Gold: $5,176.69 per ounce
- Silver Surge: 2.81% gain
- India Gold Price: ₹1.63 lakh per 10 kilos
- Key Driver: Safe-haven demand amid geopolitical tensions
Analyst Views on Gold and Silver
“We anticipate a greater recovery in gold.” However, as speculative transactions predominate, silver may see erratic trading. Silver may have a slight upward bias, but overall, we are still bullish on gold,” he stated. Gold sold for more than ₹1.63 lakh per 10 kilos in India.
Silver increased 2.81% on Wednesday, March 4, with spot prices reaching almost ₹1.70 lakh. Choice Broking’s commodity and currency analyst, Aamir Makda, called the action a “typical flight-to-safety response.”
“Investors are prioritizing wealth preservation over speculative gains with the deepening of US-Iran hostilities,” Makda stated, noting that this week’s more than 3% loss in Indian equities markets has raised bullion’s safe-haven risk premiums. In the foreseeable future, he anticipates a rather optimistic trend in bullion.
US Federal Reserve and Policy Watch
Additionally, market players are keeping an eye on US monetary policy signals. Kevin Warsh, a former governor of the Federal Reserve, was proposed by US President Donald Trump to lead the central bank going forward. However, during its meeting on March 18, markets generally anticipate that the Federal Reserve would maintain interest rates.
Macro Headwinds vs Safe-Haven Demand
The current gold market is a “tug-of-war” between macro headwinds and safe-haven demand, according to NS Ramaswamy, Head of Commodity & CRM at Ventura.
“The fear of geopolitical conflicts is helping gold, but it is also having negative economic effects,” he stated. Concerns about supply disruptions might drive up the price of crude oil, which would increase inflation and real yields, which would normally put pressure on non-yielding assets like gold. Simultaneously, he said, structural support is provided by high US fiscal deficits and ongoing central bank reserve buildup.
🔍 Key Indicators to Watch
- Dollar Index Movement
- US 10-Year Bond Yields
- Crude Oil Price Trends
- Federal Reserve Policy Signals
- Geopolitical Developments
According to Ramaswamy, investors should keep a careful eye on the dollar index and US 10-year bond yields because both are still crucial to the direction of bullion.
Disclaimer: This article is for informational purposes only. Commodity investments are subject to market risks. Please consult a certified financial advisor before making investment decisions.
