New Delhi’s commodity markets witnessed dramatic volatility in gold and silver prices on Thursday, fueled by escalating tensions in the Middle East. As conflicts between the US, Israel, and Iran intensified, investors initially flocked to these safe-haven assets, driving early gains. However, profit-taking later triggered sharp declines.
By midday around 12:13 PM, April gold futures on the Multi Commodity Exchange (MCX) dipped 0.22% to 161,165 rupees per 10 grams. Silver May futures plunged 1.17%, or 3,109 rupees, to 262,451 rupees per kilogram. Earlier in the session, gold touched a daily high of 163,142 rupees per 10 grams, while silver peaked at 274,251 rupees per kilogram.
The previous day had seen silver surge up to 3.3% and gold climb over 1%, but selling pressure eased the momentum. Internationally, spot silver rose 1.2% to 84.43 dollars per ounce, and spot gold gained 0.8% to 5,176.69 dollars per ounce.
The sixth day of US-Israel-Iran clashes has disrupted global energy supply routes, heightening inflation fears. A weakening US dollar, with the dollar index up 0.22% at 98.99, made precious metals more attractive for foreign currency buyers. Recent oil price spikes and stock market rallies have also softened demand for the dollar as a safe haven.
Analysts predict silver could stabilize between 85-95 dollars per ounce before pushing toward 100 dollars. If the Strait of Hormuz remains closed, gold might reach 5,500-5,600 dollars per ounce. Crude oil benchmarks jumped too: April Brent crude rose 2.43% to 83.26 dollars per barrel, and WTI climbed 2.63% to 76.63 dollars.
Reports of a US submarine sinking an Iranian warship near Sri Lanka, killing at least 80, have amplified regional risks. For MCX gold, support levels stand at 158,000 and 162,000 rupees, with resistance at 175,000 and 180,000. Silver supports are at 250,000 and 270,000 rupees, resistance at 300,000 and 320,000.
Rising energy costs could stoke inflation, potentially delaying Federal Reserve rate cuts and supporting US bond yields. This might cap near-term upside for gold and silver, though geopolitical shocks keep traders on edge. Markets remain poised for more swings as the crisis unfolds.