Amid the escalating tensions between Iran and the US-Israel combine, reports of a potential 45-day ceasefire surfaced on Monday, lifting sentiment around non-yielding assets like gold and silver.
An Axios report, which quoted four US, Israeli and regional sources, claimed that a partial deal may be reached between the parties involved within the next 48 hours.
Spot gold prices rose 0.64% to an intraday high of $4,706.25 an ounce after the announcement. Similarly, MCX gold futures for June rose as much as 2% to Rs 1,51,390 per 10 grams.
"The recovery in bullion was driven by reports of a potential 45-day ceasefire between the US, Iran, and regional mediators, which could ease geopolitical tensions," a note by Kotak Securities highlighted.
In case of a truce, precious metals including gold and silver are slated to become dearer.
In such a scenario, spot rates for the yellow metal will find immediate resistance at $4,765 an ounce while a further upside will lift resistance levels to $4,807 an ounce and $4,944 an ounce, Kotak's brokerage note highlighted.
Similarly, June futures for the non-yielding asset on the Multi Commodity Exchange are expected to find immediate resistance at Rs 1,53,146 per 10 grams. In case the upward trend continues, the resistance levels will touch Rs 1,54,346 and Rs 1,58,232.
What About The Devil's Metal?
Silver is expected to follow gold uphill in case a ceasefire is announced in the Middle East. The white metal's spot rate rose 0.77% to $73.57 an ounce intraday, while MCX futures for May saw a sharp increase of almost 1.7% to Rs 2,36,390 per kg.
Immediate resistance for spot silver prices, as per Kotak, lies at $74.67 an ounce, while further upmove will open up $75.60 and $78.60 levels.
Similarly, immediate resistance for silver futures for May on the MCX lies at Rs 2,40,474 per kg, marking a jump of nearly 2% from current highs. Further upside will boost resistance levels to Rs 2,43,458 and Rs 2,53,119.
ALSO READ: Iran, Israel Will Continue War Even If US Pulls Out; Ceasefire Unlikely: JNU Professor
Iran War Jolt
The Iran war has stirred the commodity markets, with crude oil surging sharply and precious metals like gold and silver plunging.
Generally viewed as safe haven assets during times of uncertainty, spiking energy prices along with a strengthening US greenback have weighed on the demand for these metals.
While the prospect of a 45-day ceasefire may help lift the market sentiment, the possibility remains fragile as Trump continues to escalate rhetoric, including renewed threats over the Strait of Hormuz, keeping risk premium elevated, as per analysts.
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