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Gold, Silver Soar as Middle East Conflict Fuels Inflation Fears

Gold and silver prices surged significantly as escalating Middle East tensions pushed investors toward safe-haven assets. The conflict, now in its sixth day, has disrupted global energy supply routes, heightening inflation concerns. Analysts predict silver could consolidate before targeting $100 per ounce, while gold may rally toward $5,500 if the Strait of Hormuz remains disrupted. Higher energy prices are expected to fuel inflation, potentially delaying US Federal Reserve rate cuts and supporting Treasury yields.

Key Points: Gold & Silver Prices Surge on Middle East Tensions, Inflation

  • Gold & silver surge on safe-haven demand
  • Middle East conflict disrupts energy routes
  • Inflation fears delay potential Fed rate cuts
  • Analysts predict further price rallies
2 min read

Precious metals surge over inflation concerns amid escalating Middle East tensions

Gold and silver prices jump as Middle East conflict escalates, disrupting energy supplies and stoking inflation concerns. Analysts see further upside.

"Gold has support at Rs 1,58,000 and Rs 1,62,000 while resistance at Rs 1,75,000 and Rs 1,80,000. - Analyst"

New Delhi, March 5

Gold and silver prices surged significantly on Thursday amid escalating conflict in the Middle East, pushing investors toward safe‑haven assets.

MCX gold April futures gained 0.31 per cent to Rs 1,62,018 per 10 grams on an intra-day basis. Meanwhile MCX silver May futures gained 1.50 per cent to Rs 2,69,551 per kg.

Earlier in the day silver prices on MCX had jumped 3.3 per cent while gold advanced over 1 per cent but later dipped over mild profit booking.

Spot silver jumped 1.2 per cent to $84.43 per ounce, while spot gold climbed 0.8 per cent to $5,176.69 per ounce.

Conflict between the United States, Israel and Iran entering the sixth day and disrupted global energy supply routes heightened inflation concerns. Further, weakness in the US dollar acted as headwinds to bullion.

The dollar index surged 0.22 per cent to 98.99, making greenback-backed bullion cheaper for buyers in overseas currencies. The dollar recorded its steepest fall in three as rising oil prices and gains in global equities reduced demand for the safe-haven currency.

Analysts predicted that silver prices could consolidate between $85 and $95 before resuming momentum toward $100, while gold rallied toward $5,500-$5,600 levels if the shutdown of the Strait of Hormuz continues, disrupting global energy supply routes.

In the early morning trade, the April contract of the benchmark crude on the Intercontinental Exchange was trading at $83.26 per barrel, up by almost 2.43 per cent from its previous close.

The April contract of West Texas Intermediate on the NYMEX went up 2.63 per cent to $76.63 per barrel.

A US submarine sank an Iranian warship near Sri Lanka, reportedly killing at least 80 people. The incident marked a significant escalation in the ongoing conflict and heightened risks of conflict expanding regionally.

"Gold has support at Rs 1,58,000 and Rs 1,62,000 while resistance at Rs 1,75,000 and Rs 1,80,000. MCX silver has support at Rs 2,50,000 and Rs 2,70,000, and resistance is at Rs 3,00,000 and Rs 3,20,000," an analyst said.

Analysts forecast higher energy prices causing inflation and delaying potential interest rate cuts by the US Federal Reserve, thereby supporting US Treasury yields in the near term, capping upside in precious metals.

- IANS

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Reader Comments

R
Rohit P
Silver at nearly 2.7 lakh per kg! And they say it's the poor man's gold. This surge is directly hitting small artisans and jewellers in our local market. The wedding season is coming, how will middle-class families manage?
D
David E
While the analysis is solid, the article focuses heavily on international factors. It would be helpful to have more on the domestic demand side – how are Indian households and institutions reacting? Are we seeing increased buying or holding patterns?
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Aditya G
The real worry is inflation. Petrol prices will shoot up if the Strait of Hormuz is affected. Gold prices are a symptom, the disease is the conflict disrupting trade. Hope our government has a plan to cushion the impact on essential commodities.
S
Sarah B
Interesting to see the direct link between geopolitical events in the Middle East and the price of my grandmother's bangles in Chennai. The global market is truly interconnected. The support and resistance levels mentioned are useful for small-time investors.
K
Karthik V
Time to look at Sovereign Gold Bonds again? They seem like a better option than physical gold at these prices, especially with the interest. But with the US Fed likely delaying rate cuts, maybe waiting a bit is wiser. Tough call.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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