MUMBAI: Precious metals gained over 4% on the futures market with gold crossing Rs 1.68 lakh or the 4.15% mark, while the white metal gained Rs 2.85 lakh or 3.6% as the war on Iran has led to the safe haven demand for these metals.
Gold April delivery was trading up 4.15% at Rs 168,808/10 grams while silver March delivery was up 3.64% at Rs 285,005/kg on the MCX on Monday. On the CME, the yellow metal was trading up 2.6% at $5,384/oz while the white metal was trading up 0.76% at $92.57/oz.
Commenting on the rally by precious metals, Renisha Chainani, head of research at gold trading platform Augmont, said gold and silver have started the week on a strong footing, a move that was widely anticipated as investors rushed toward traditional safe-haven assets amid a sharp escalation in geopolitical tensions in West Asia.
“The risk of a prolonged and multi-front conflict has reinforced safe-haven demand, pushing gold back above the $5,400 mark,” she said.
Silver, meanwhile, crossed the $97 level earlier in the day but lost the momentum by evening in global markets, setting up a potential extension towards fresh highs. The rally is underpinned by a persistent multi-year supply deficit, strong industrial demand from electric vehicles, AI infrastructure, and solar energy, as well as renewed investment inflows and geopolitical risk premiums, she said.
Two emerging developments could further tighten the silver market. First, China, which is the world’s largest silver consumer, has accelerated post-Lunar New Year restocking of silver and copper. Amid trade tensions and inflation concerns, China appears to be strategically stockpiling key metals to secure supply chains for its manufacturing base, particularly in EVs and renewables. Export controls and proactive inventory accumulation signal concerns over future availability.
Second, Mexico, which is the world’s largest silver producer accounting for roughly a quarter of global output, has a significant portion of mines located in regions affected by cartel-related violence. Any escalation in disruptions could materially impact production and logistics, potentially triggering a supply shock in an already tight market, she said.