Gold And Silver Heading Towards Record Prices Due To US-Israel-Iran War

 

Mumbai : Tensions in the Middle East have taken a new turn after the US and Israel carried out a major attack on Iran. The death of Tehran's supreme leader, Ayatollah Ali Khamenei, has increased volatility in global markets, and investors have rushed to purchase gold as a safe bet. Spot gold rose 1.72% to $5,368 per ounce in early March. (A troy ounce is about 31.10 grams; this rate is approximately for 31 grams of gold)

Meanwhile, the American futures rate jumped by 2.58 % to $ 5,382. This is considered a four-week high. It is being speculated that the price of 10 grams of gold in the domestic market is likely to touch the threshold of Rs two lakhs. Silver is also moving towards Rs 3.5 lakhs. Silver rose by 1.68% to $ 95.35 per ounce. Platinum has increased by 0.74% and palladium by 0.25%.

 

Gold is traditionally considered a safe investment and has already seen a huge leap in prices this year. It has increased by about 64 per cent since 2025. This increase in the price of gold is attributed to several reasons. First, Central banks around the world have been purchasing gold in large quantities, investment in gold ETFs has been increasing, and there is a possibility of a reduction in interest rates in the US banking systems. Meanwhile, the US Producer Price Index (PPI) has increased more than expected, raising fears of rising inflation. Apart from this, investors are waiting to get information on economic reports related to employment, which will be released this week. War can worsen the situation.

 

If the war in Iran and the surrounding region continues, the prices of gold on the bullion market will continue to rise. Speaking to ETV Bharat, Indian Bullion Association Secretary Surendra Mehta said, "After the war started, the market went up to $5500. Later, it came down a little to $5368. This is the limit for the rate to increase at present. However, if the war continues for a long time, the market can go up to $5800-6000. This can create many problems."

Mehta added that India is a big importer of gold, and the war will adversely affect the future. "India also imports gold from European countries. Currently, there is sufficient gold reserves in the country, hence there is no disparity in the demand and supply. However, if the war continues, the situation can worsen.

Most of the gold is transported by air. If the airlines remain closed, the supply can be affected. Therefore, one hopes for an early end to this war."

 

The escalating conflict in the Middle East is likely to create a shortage of gold and rough diamonds in India. There are also reports of prospective disruption of supplies of both via Dubai could impact trade. Dubai is the largest hub for rough diamonds and the second largest supplier of gold biscuits to India. Mehta explained that these disruptions can directly impact the Indian bullion and gemstone industry.

India imports about 800 to 850 tonnes of gold every year. Out of this, 50 to 60 per cent of the gold comes via Dubai. Also, most of the rough diamonds required for India's large diamond polishing industry too are brought from Dubai. With air routes currently closed, there is a possibility of delays in supplies. According to experts, if this situation continues for a long time, the availability of gold and polished diamonds in the domestic market may decrease, and prices may increase further.