Gold and silver prices rose by over 1% on Wednesday due to heightened tensions between the US-Israeli alliance and Iran, prompting a surge in safe-haven demand. MCX gold April futures increased by 1.04% to Rs 1,62,790 per 10 grams, while MCX silver May futures saw a 1.84% gain to Rs 2,70,200 per kg.
The escalating conflict in the Middle East and concerns about potential energy disruptions drove investors towards safe-haven assets. Additionally, worries about inflation in the US led investors to speculate on the possibility of the US Federal Reserve maintaining interest rates at current levels for an extended period.
Despite the gains in precious metals, gold and silver exchange-traded funds (ETFs) experienced a significant decline on Wednesday. Major silver ETFs dropped between 7.12% to 7.43%, while Gold ETFs saw decreases ranging from 3% to 3.87%.
Spot gold prices surged by about 1% to $5,138.46 per ounce, with US gold futures for April delivery also rising by 0.5% to $5,147.10. Gold has witnessed a 19% increase year-to-date following a 64% surge in 2025, primarily fueled by geopolitical unrest and robust central bank purchases.
The dollar index climbed by 0.15% to 99.20, making gold more expensive for buyers using foreign currencies, thereby limiting further gains in the precious metal. US President Donald Trump announced military actions against Iranian targets, while Iran retaliated by attacking vital oil infrastructure in the Gulf region.
This development prompted investors to retreat from equities amid concerns of broader disruptions in energy markets and shipping lanes. WTI crude oil prices surpassed $75 per barrel, extending a two-day gain of around 11%, while Brent crude traded near $81 per barrel due to the escalating conflict in the Middle East and ongoing shipping disruptions through the Strait of Hormuz.
Investors are closely monitoring key economic indicators such as US Manufacturing and Non-Manufacturing PMI, ADP Non-Farm Employment Change, and Unemployment data to gauge the future direction of Federal Reserve policies. An analyst noted that gold has support levels at Rs 1,58,000 and Rs 1,62,000, with resistance at Rs 1,75,000 and Rs 1,80,000, while MCX silver has support at Rs 2,50,000 and Rs 2,70,000, and resistance at Rs 3,00,000 and Rs 3,20,000.
