- Gold April futures on MCX rose 2.8%, nearing Rs 1.67 lakh per 10 grams
- Silver May futures increased 2.6%, surpassing Rs 2.9 lakh per kg on MCX
- US, Israel strikes on Iran and Iran's missile retaliation escalated tensions
Gold and silver prices spiked sharply on Monday as investors sought refuge in safe-haven assets amid escalating geopolitical tensions in the Middle East.
On the Multi Commodity Exchange (MCX), gold April futures rose 2.8% and touched highs near Rs 1.67 lakh per 10 grams, while silver May futures rose 2.6% to above Rs 2.9 lakh per kg.
The rally in bullion coincided with heightened volatility across global markets following military escalation between the US, Israel and Iran over the weekend.
Escalation Triggers Risk Repricing
Over the weekend, the US and Israel launched extensive strikes across Iran targeting key infrastructure and leadership. Iran retaliated with missile attacks toward Israel and US forces in the region. Iranian state media confirmed that Supreme Leader Ayatollah Ali Khamenei was killed during the strikes, and Tehran declared national mourning while vowing further retaliation.
Market participants said the escalation has intensified risk aversion globally, prompting investors to increase allocations to hard assets.
Harshal Dasani, Business Head at INVAsset PMS, said the conflict has reinforced the structural demand for precious metals.
“The escalation between Israel and Iran has reinforced the structural bid in precious metals. Whenever geopolitical fault lines widen, gold becomes the first port of safety — and that is exactly what we are witnessing. With crude firming and global risk appetite weakening, investors are rotating toward hard assets,” he said.
Dasani added that for India, higher oil prices raise inflation risks, strengthening gold's appeal as a hedge. He noted that central bank accumulation globally has already been strong, and fresh geopolitical stress adds another layer of demand.
On silver, he said the metal's dual nature — as both a safe-haven and an industrial commodity — makes it more volatile but potentially more responsive during stress cycles. “In this environment, metals are not just reacting — they are repricing risk,” he said.
Oil Spike, Rupee Weakness Add to Momentum
The move in precious metals came alongside a sharp surge in crude oil prices. Brent crude jumped as much as 13% to rise above $82 per barrel — its highest since January 2025 — before trimming gains. According to a Bloomberg report, tanker traffic through the Strait of Hormuz has largely stalled as shipowners and traders voluntarily paused operations amid the conflict. The strait, off Iran's coast, carries about one-fifth of global oil supplies.
Meanwhile, the Indian rupee weakened past the ₹91 per US dollar mark, its lowest level in roughly a month. The currency pressure reflected rising oil price concerns and broader risk-off sentiment in global markets.
In response to the widening crisis, OPEC agreed at a pre-scheduled weekend meeting to raise production quotas next month by 206,000 barrels per day. The alliance, which includes Iran, Saudi Arabia and Russia, had already been expected to proceed with gradual supply increases before hostilities intensified.
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