Gold and silver prices are expected to start the week on a strong note when trading resumes on Monday, as rising tensions in the Middle East push investors towards safe-haven assets, analysts said.The sharp rise in risk aversion comes after US President Donald Trump announced “major combat operations” in Iran following Israeli strikes on Tehran. Iranian state media on Sunday confirmed the death of Supreme Leader Ayatollah Ali Khamenei, prompting retaliatory strikes by Iran on US military facilities and Israeli targets in the region, Press-TI reported.Market experts said the path of bullion prices will depend on the duration and intensity of the conflict, as global investors reassess risk exposure amid fears of prolonged instability.
“Gold and silver prices are expected to remain highly volatile with a gap in the opening session on Monday, as the conflict in the Middle East – which includes renewed US and Israeli military action against Iran – continues to dominate global risk sentiment,” said Jatin Trivedi, Vice President Research Analyst for Commodities and Currencies at LKP Securities.He added that the escalation of hostilities and fading hopes for a quick diplomatic solution are pushing investors towards traditional safe haven assets.
“As global stocks and risk assets come under pressure, capital tends to shift to precious metals, which act as a hedge against uncertainty,” Trivedi said.The local goods market will remain closed on Tuesday on the occasion of Holi.On the Multi Commodity Exchange (MCX), silver futures for March delivery rose by Rs 22,054 or 8.72 per cent last week, while gold futures for April delivery rose by Rs 5,228 or 3.33 per cent.Bullion ended another week in positive territory, with silver rising over 8 per cent and gold up 3.2 per cent, said Pranav Mir, Vice President, EBG – Commodity and Currency Research, JM Financial Services.“Bullion remains supported by safe-haven orders, continued buying from central banks and exchange-traded funds, amid growing geopolitical and economic uncertainty in global markets,” Mir said.He noted that the recent US Supreme Court ruling against Trump’s trade tariffs, describing most of them as illegal, has added to global uncertainty, with many companies filing lawsuits to recover funds.In global markets, silver futures on the Comex jumped $10.34, or 12.55 percent, over the past week, while gold gained $167, or 3.3 percent.Trivedi also pointed to energy market developments, saying rising crude oil prices on fears of supply disruptions through the Strait of Hormuz are further supporting interest in bullion.“However, the impact may not be uniform – if there are diplomatic developments or signs of de-escalation over the weekend, precious metals may see profit taking after an initial 3-6 percent rise,” he warned.Analysts added that macroeconomic data to be released this week, including manufacturing and services PMI readings, US retail sales, non-farm payrolls and employment data, as well as euro zone inflation and the European Central Bank meeting, will also weigh on global market sentiment.(Disclaimer: Recommendations, opinions regarding stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times Of India)