Gold rate jumped 2% while silver soared 6% on the MCX on Monday, February 23, amid escalating US-Iran tensions and the dollar’s significant fall. MCX gold April futures jumped by over ₹3,700, or 2.4%, to ₹1,60,600 per 10 grams, while MCX silver March futures jumped by nearly ₹15,200, or 6%, to ₹2,68,120 per kg.
The dollar index fell 0.45% to 97.36, making green-backed bullion cheaper in overseas currencies and prompting more buying.
However, the major trigger for gold prices is the escalating tensions between the US and Iran.
US President Donald Trump, as Mint reported, issued an ultimatum that the US needs to “make a meaningful deal” with Iran, and emphasised that the coming 10 days will be crucial in determining whether an agreement is reached. Meanwhile, student protests have erupted at multiple universities in Iran.
Another factor driving gold prices is the renewed concerns over US tariffs after the US Supreme Court struck out Trump’s tariffs under the International Economic Emergency Powers Act (IEEPA). Trump later announced a 15% new tariff on the trading partners of the US.
“Gold and silver show very high price volatility and gained last week amid safe haven buying due to the U.S. and Iran tensions and the U.S. Supreme Court ruling against Trump tariffs. The U.S. President has given 10-15 days’ time to Iran to make a deal and increased tensions in the Middle East as China is opposing any kind of military action of the U.S. on Iran,” Manoj Kumar Jain of Prithvifinmart Commodity Research, noted.
“The U.S. Supreme Court upheld the lower court’s decision with a 6-3 majority on Trump tariffs. However, the U.S. President imposed global tariffs of 15% after the Supreme Court’s decision and increased uncertainty in the global financial markets and support prices of precious metals,” Jain added.
Moreover, concerns over slowing US economic growth are also supporting gold’s safe-haven appeal.
The US GDP rose at a 1.4% annual rate in the fourth quarter, down from 4.4% in the July-September quarter and 3.8% in the quarter before that.
“We expect gold and silver prices to remain volatile this week amid volatility in the dollar index, US-Iran tensions and reopening of Chinese markets after a week-long holiday,” said Jain.
According to Jain, gold has support at $5,055 and $5,000 while resistance is at $5,122 and $5,164 per troy ounce, and silver has support at $80 and $76.20, while resistance is at $84.80 and $88 per troy ounce in today’s session.
MCX gold, according to Jain, has support at ₹1,54,400 and ₹1,53,150 and resistance is at ₹1,59,100 and $1,60,600, while silver has support at ₹2,48,800 and $2,42,000, and resistance is at ₹2,57,700 and ₹2,63,620.
“We suggest buying gold on dips around ₹1,55,500 and ₹1,54,400 with a stop loss of ₹1,52,800 for the target of ₹1,59,100 and ₹1,60,000, and suggest buying silver around ₹2,48,800 and ₹2,44,000 with a stop loss below ₹2,38,000 for the target of ₹2,58,000 and ₹2,62,000,” said Jain.
Jigar Trivedi, Senior Research Analyst at IndusInd Securities, believes silver and other metals may see higher trading volumes this week as Chinese markets reopen following a long holiday.
According to Trivedi, MCX gold April futures may reclaim ₹1,60,000 per 10 grams, as the trend is positive in global markets as well. MCX silver March prices are likely to appreciate to ₹2,65,000 per kg amid a bullish trend in the international markets.
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
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