Gold and silver prices moved sharply higher in Delhi on Monday, August 24, with the yellow metal climbing to its strongest level in more than five months. Growing geopolitical uncertainty, demand for safe-haven assets and weakness in the US dollar provided fresh support to bullion prices.
In the Delhi bullion market, 24-carat gold became costlier by ₹900 and reached ₹1,64,400 per 10 grams. The precious metal had ended the previous trading session at ₹1,63,500 per 10 grams.
Silver also extended its upward run, registering a sizeable increase of ₹3,500 per kilogram. With this rise, the white metal reached ₹2,53,500 per kg.
Gold Returns to Levels Last Seen in March
According to data from the All India Sarafa Association, the latest increase has taken gold close to levels not seen for several months. Gold was around ₹1,64,300 per 10 grams on March 9, making Monday's rate one of the highest levels recorded since then.
The latest rally comes at a time when investors are closely tracking developments in international markets. Precious metals such as gold often attract additional buying during periods of political or economic uncertainty because they are widely viewed as defensive assets.
Escalating tensions involving the United States and Iran have increased nervousness across global markets. This uncertainty has contributed to stronger demand for gold as some investors seek assets that may offer protection during volatile periods.
Silver Gains ₹3,500 in a Single Session
The upward momentum was not limited to gold. Silver recorded gains for a third consecutive trading session on Monday.
The metal rose by ₹3,500 to ₹2,53,500 per kilogram, compared with its previous closing price of ₹2,50,000 per kg.
The latest price also brings silver back near levels recorded earlier in the year. On April 17, silver had traded around ₹2,53,000 per kilogram.
Silver prices can be influenced by both investment demand and industrial consumption. As a result, movements in global markets, the US dollar, economic expectations and demand from industries can all contribute to fluctuations in its price.
Why Are Gold Prices Rising?
Several international factors appear to be supporting the latest rally in bullion.
One major factor is the softer US dollar. Since gold is internationally priced in dollars, weakness in the American currency can make the precious metal relatively more attractive to buyers using other currencies.
At the same time, geopolitical uncertainty has strengthened demand for assets traditionally considered safer during periods of market stress.
Gaurav Garg, Head of Research at Lemonn Markets Desk, attributed the strength in domestic gold prices to safe-haven demand and weakness in the US currency, with heightened US-Iran tensions also influencing investor sentiment.
Gold Moves Higher in the International Market
The positive trend was visible outside India as well.
Spot gold in the international market advanced by $42.45, or approximately 1%, to around $4,646.54 per ounce. Silver, meanwhile, was trading close to the $69-per-ounce level.
International bullion movements are important for Indian buyers because domestic gold prices are affected by several factors, including global prices, currency movements, import-related costs and local market demand.
This means a significant international rally can also influence prices paid by consumers in India.
Inflation and Federal Reserve Policy Become the Next Key Triggers
Although geopolitical developments are currently supporting gold, traders are also turning their attention to inflation and the future policy direction of the US Federal Reserve.
A prolonged geopolitical conflict can affect energy markets, particularly crude oil prices. A sharp increase in oil prices can create additional inflationary pressure, which could complicate monetary policy decisions for central banks.
Kaynath Chainwala, AVP Commodity Research at Kotak Securities, indicated that a rise in crude oil prices linked to Iran-related tensions could create a fresh inflation challenge for the Federal Reserve.
The key question for markets will be whether policymakers view any resulting increase in inflation as temporary or see it as a more persistent risk.
Interest-rate expectations are particularly important for gold because the metal does not generate regular interest income. Changes in expectations around US rates can therefore have a significant impact on investor appetite for bullion.
What Should Gold Buyers Watch Now?
Gold and silver are currently benefiting from a combination of geopolitical uncertainty, currency movements and safe-haven buying. However, bullion prices can change quickly when global conditions shift.
Investors and jewellery buyers may want to keep an eye on US-Iran developments, crude oil prices, the US dollar, inflation data and signals from the Federal Reserve before making major decisions.
Domestic buyers should also remember that the final retail price of gold jewellery can differ from the quoted bullion rate because of making charges, applicable taxes and other costs.
With gold now above ₹1.64 lakh per 10 grams in Delhi and silver crossing ₹2.53 lakh per kilogram, precious metals have once again entered the spotlight. Whether the rally continues could depend heavily on how geopolitical risks, inflation expectations and global monetary policy evolve in the coming days.
Disclaimer: This article is intended only for general information and awareness. Gold, silver and other investment prices can fluctuate. Readers should consider their financial circumstances and consult a qualified professional before making investment decisions.
