New Delhi: Gold and silver prices rose on Friday as renewed geopolitical tensions in West Asia prompted investors to return to bullion, traditionally viewed as a safe-haven asset during periods of uncertainty.
In the domestic market, gold prices increased by Rs 1,320 to Rs 1,41,000 per 10 grams, while silver surged by Rs 5,380 to Rs 2,25,000 per kg, reflecting a rebound in demand.
Globally, both metals showed modest gains after recent declines appeared to stabilise. On the Comex exchange, gold rose by 0.33% to trade at Dollar 4,423 per ounce, recovering from a nearly 3% drop in the previous session. Silver also edged higher by 0.29% to Dollar 68.13 per ounce.
The shift in sentiment came after Donald Trump signalled a delay in potential military action on Iranian energy facilities, extending the deadline for an agreement with Iran by 10 days. The move offered temporary relief to markets, which have been unsettled by a month-long geopolitical standoff.
Despite the uptick, analysts say underlying pressures on bullion remain significant. Rising energy prices have heightened concerns about inflation, increasing the likelihood that central banks will maintain higher interest rates for longer. This tends to reduce the appeal of non-yielding assets such as gold and silver.
At the same time, a stronger US dollar has weighed on demand. The dollar index has hovered around 100, gaining roughly 2.3% since the onset of the conflict, making commodities more expensive for buyers using other currencies.
Additional pressure has come from central bank activity. According to reports, Turkey’s central bank sold or swapped around 60 tonnes of gold in the early weeks of the conflict, adding supply to the market.
Over the past month, gold prices have fallen by approximately 17%, a notable deviation from its traditional role as a safe haven. Instead, the metal has shown a closer correlation with equity markets and an inverse relationship with oil prices during this period.
Market participants are now closely monitoring geopolitical developments and central bank signals, which are expected to determine the next direction for bullion prices.
