MUMBAI: Precious metals gained over 3.5% on the futures market with gold crossing Rs 1.68 lakh mark and the white metal gaining to Rs 2.85 lakh as the war on Iran has led to the safe haven demand for these metals.
At 1200 gold April delivery was trading up 3.6% at Rs 168,040/10 grams while silver March delivery was up 3.6% at Rs 285,010/kg on the MCX on Monday. On the CME, yellow metal was trading 2.7% at $5,391/ounce while the white metal was trading up 2.25% at $95.35/oz.
However, the exchange traded funds of these metals rallied between 5% and 7%, fueled by the Iran war. While the gold ETFs were up 5% silver rallied over 7% as safe-haven demand lifted bullion as equities fell sharply.
At around 1200 hrs, Tata silver ETF surged over 7%, while ICICI Prudential silver ETF, SBI silver ETFs and Nippon India silver ETF climbed more than 6%.
On the gold side, ICICI Prudential rose over 5%, Tata gained more than 5% while Nippon and SBI advanced 4-5%.
The uptick reflects renewed safe-haven demand as escalating US-Israel and Iran tensions pushed investors away from risk assets. Equity markets across Asia opened lower, and volatility spiked, with domestic indices trading deep in the red during early deals. The domestic equity indices are down over 1.5% while crude rose more than 7% and the rupee fell to a month low crossing 91.25 mark.
Historically, episodes of elevated conflicts have supported gold and silver prices due to their status as defensive assets. Analysts say sustained gains in bullion will depend on how long geopolitical uncertainty persists and whether crude prices remain elevated.