Gold and Silver Prices Continue Upward Trajectory After Worst Crash in Over 40 Years
Gold and silver prices began Friday's session on a firm note on the Multi Commodity Exchange of India, buoyed by a softer US dollar and improving sentiment around geopolitical risks. This comes after the worst crash in over 40 years, with investors closely watching the outlook for these precious metals.
Market Performance on MCX and Global Platforms
On the MCX, silver futures for May 2026 delivery rose by Rs 5,140, or 2.3%, to Rs 2,25,014 per kilogram. Gold futures for April 2026 delivery also moved higher, climbing Rs 1,500, or 1%, to Rs 1,40,900 per 10 grams. In global markets, gold prices gained more than 1%, with spot gold up 1.1% at $4,428.30 per ounce as of 0228 GMT, though it remained about 1.3% lower for the week so far. Spot silver also advanced 1.1% to $68.80 per ounce.
Geopolitical Factors Influencing Prices
US President Donald Trump indicated progress in discussions with Iran and announced a 10-day halt to strikes on energy infrastructure, extending the pause into April. However, an Iranian official described the US proposal to end the conflict as "one-sided and unfair." This geopolitical tension has contributed to market volatility, with Brent crude remaining above $105 per barrel, fuelling inflation concerns as the conflict disrupts shipments through the Strait of Hormuz.
Inflation and Interest Rate Dynamics
Elevated oil prices are likely to push up transportation and production costs, adding to inflationary pressures. While higher inflation can support gold's role as a hedge, rising interest rates tend to dampen demand for the non-yielding asset. According to CME Group's FedWatch Tool, markets have now ruled out any U.S. rate cuts in 2026, compared with earlier expectations of two cuts before the conflict escalated.
Expert Insights on Market Trends
Tim Waterer, chief market analyst at KCM Trade, noted, "For weeks, gold has been treated as a liquidity asset sold to cover volatility and margin calls elsewhere, but at current levels, it is now looking more like a value proposition for investors, which is why it's back in favour today. However, hawkish central banks wary of persistent oil-driven inflation continue to act as a heavy lid on gold's ambitions to the upside, keeping any rally firmly in check."
Recent Performance and Outlook
Gold has dropped about 17% since the US-Israeli conflict with Iran began on February 28, weighed down by a stronger dollar, which has gained more than 2% over the same period. The weakening of the dollar made bullion, priced in the greenback, more affordable for investors using other currencies. MCX gold futures for April delivery may see an upward move towards Rs 1,40,000 per 10 grams, in line with positive trends in international markets, according to experts.
Other Precious Metals and Broader Market Context
Among other precious metals, platinum rose 2.1% to $1,865.13, while palladium advanced 2.7% to $1,389.80. The decline in the dollar increased the appeal of bullion for investors holding other currencies, while easing oil prices helped temper inflation concerns, supporting expectations of possible interest rate cuts by the US Federal Reserve.
Precious metals have come under pressure as the ongoing Middle East conflict and a surge in energy prices heightened concerns about inflation, strengthening expectations that major central banks could increase interest rates this year. Investors are advised to monitor these factors closely for future price movements.
