Will gold and silver prices rise on safe-haven demand amid Iran-Israel war?

Gold and silver prices are expected to remain volatile this week amid geopolitical tensions between the US and Iran, fluctuations in the dollar index and uncertainty in global financial markets, according to Manoj Kumar Jain.

The precious metals witnessed sharp price swings last week as rising crude oil prices and inflation concerns weighed on sentiment, even as safe-haven demand provided support.

On Friday, however, both metals ended higher in the international markets. Manoj Kumar Jain said gold April futures settled at $5,158.70 per troy ounce, up 1.58 per cent, while silver May futures settled at $84.311 per troy ounce, gaining 2.59 per cent.

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In the domestic market, gold April futures on MCX settled at Rs 1,61,634 per 10 grams, rising 1.23 per cent, while silver May futures ended at Rs 2,68,285 per kilogram, up 2.32 per cent.

Weekly Decline Amid Oil Price Surge

Despite Friday’s gains, both precious metals declined last week as escalating tensions between the US and Iran pushed crude oil prices higher and raised concerns about inflation.

“Gold and silver gained on Friday, but prices plunged last week as the US-Iran war ignited crude oil prices and created inflation worries,” Jain said.

He said higher oil prices and rising geopolitical tensions in the Middle East have increased the possibility of tighter monetary policies by global central banks, which have limited gains in precious metals.

Weak US Jobs Data Supports Prices

However, weak U.S. economic data supported metals prices. “US non-farm payroll data released last week showed that 92,000 jobs were lost in the previous month. The disappointing US job data supported gold and silver prices,” Jain said.

He added that safe-haven demand is also supporting the metals amid global uncertainties. “Precious metals are holding their support levels amid safe-haven buying due to the Middle East conflicts and global uncertainties,” Jain said.

Key Support and Resistance Levels

According to him, both metals are witnessing very high price volatility and are likely to trade in a wide range in the near term. Jain said silver prices could hold a key support level of $74 per troy ounce, while gold could maintain support around $4,940 per troy ounce on a closing basis this week.

He expects continued volatility in the coming sessions due to geopolitical developments and currency fluctuations. “We expect gold and silver prices to remain volatile this week amid volatility in the dollar index, the US-Iran war and fluctuations in global financial markets,” he said.

For the international market, Jain said gold has support at $5,115–4,964 per troy ounce and resistance at $5,220–5,255. Silver is likely to find support at $80.80–76.60 per troy ounce, while resistance is placed at $88.00–91.40.

In the domestic market, gold on the Multi Commodity Exchange (MCX) has support at Rs 1,59,900–1,57,700 per 10 grams and resistance at Rs 1,64,000–1,66,600.

Silver has support at Rs 2,61,600–2,55,500 per kilogram and resistance at Rs 2,74,000–2,78,000, he said.

Strategy for Traders and Investors

Jain advised traders to adopt a range-bound strategy in the current volatile environment. “We suggest traders trade in the given range with a buy-on-dips strategy,” he said. For long-term investors, he recommended accumulating precious metals gradually during corrections.

“Long-term investors could accumulate gold and silver in a staggered way on every price correction,” Jain added. He said geopolitical tensions, crude oil prices and movements in the dollar index will remain the key factors influencing the direction of gold and silver prices in the near term.