Gold and silver prices on the Multi Commodity Exchange of India (MCX) surged sharply on Friday, supported by heightened safe-haven demand amid escalating geopolitical tensions in the Middle East. Following fresh Israeli attacks on Iran and the US military involvement, bullion markets are expected to remain sensitive to further developments when trading resumes next week.
Israel said that it had launched a pre-emptive on Saturday, diminishing prospects for a diplomatic resolution to Tehran’s long-standing nuclear dispute with Western nations.
Regional tensions intensified further after in the United Arab Emirates (UAE), as well as in Doha and Riyadh, hours after Israel and the United States described their actions as “major combat operations” against Iran.
The escalating geopolitical conflict is likely to reinforce safe-haven flows into precious metals. MCX gold rate settled sharply higher near ₹1.62 lakh per 10 grams on Friday, while MCX silver rate surged over 5% to close around ₹2.82 lakh per kilogram.
In international markets, gold and silver prices also rallied as reports of a unsettled investors and boosted safe-haven demand. Gold prices have risen more than 20% in February, marking a seventh consecutive monthly gain — the longest such streak since 1973.
Can MCX gold price reach ₹2 lakh and MCX silver price hit ₹3 lakh?
Regarding US-Iran tensions, Yaha Chauhan, Research Analyst, INVasset PMS said that the geopolitics adds a risk premium to bullion, particularly through crude-led inflation fears and currency volatility.
“MCX gold rate at ₹2 lakh per 10 grams and silver rate at ₹3 lakh per kg cannot be ruled out in an extreme escalation scenario, especially if crude spikes sharply and the rupee weakens. However, such levels would require sustained geopolitical stress and global liquidity support,” said Chauhan.
He believes that and silver prices remain in a strong structural uptrend, but expects sharp volatility alongside momentum.
Gold-Silver Ratio Declines
The gold-silver ratio has declined to around the 56 level, signalling a notable shift in relative performance between the two precious metals. Traditionally, a high gold-silver ratio — above 80 or even 100 — indicates that gold is outperforming and silver may be undervalued. Conversely, a lower ratio — near 50 or below — suggests that silver has strengthened significantly, at times to stretched levels.
“The gold-silver ratio dropping to 56 is a significant signal. Historically, when the ratio compresses sharply, it indicates that silver is outperforming gold and that the market is transitioning from pure fear-driven buying to a broader metals upcycle. Gold is being accumulated aggressively by central banks as a hedge against currency debasement and geopolitical fragmentation,” said Yaha Chauhan, Research Analyst, INVasset PMS.
He added that silver is currently benefiting from a dual tailwind — safe-haven demand alongside structural supply constraints. “When silver begins to catch up aggressively, it typically reflects strong momentum across the precious metals complex rather than weakness in gold,” Chauhan noted.
Technical View
Gold and silver prices are exhibiting constructive technical setups, supported by firm demand at higher bases. MCX gold price has extended its upward trajectory after resolving the prior consolidation range, now trading firmly above the ₹1,60,000 structural pivot.
“The earlier falling channel resistance has been decisively breached, converting prior supply into short-term support. is currently stabilizing near ₹1,62,000 after registering fresh swing highs. The ₹1,59,500 – ₹1,60,000 zone now acts as immediate demand following breakout acceptance. Momentum structure reflects higher highs and higher lows on the hourly framework, suggesting trend continuation rather than exhaustion,” said Ponmudi R, CEO of Enrich Money.
According to him, sustained holding above ₹1,60,000 opens upside potential toward ₹1,63,500 – ₹1,65,000, while structural invalidation emerges only on a decisive breakdown below ₹1,58,000, which would disrupt the current higher-low sequence.
Meanwhile, has delivered a strong impulsive breakout, clearing the prior consolidation ceiling and accelerating toward the ₹2,80,000 – ₹2,85,000 band, a move which reflects momentum-driven participation rather than slow accumulation, supported by expanding price range.
“The ₹2,72,000 – ₹2,75,000 zone now transitions into a demand base after breakout confirmation. price action indicates strength with shallow pullbacks, suggesting accumulation on dips. Sustained trade above ₹2,85,000 may trigger continuation toward ₹2,90,000 – ₹2,95,000,” said Ponmudi R.
However, failure to hold ₹2,72,000 would introduce corrective rotation, but structural weakness becomes relevant only below ₹2,65,000, he added.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.