US-Iran war: Gold and silver prices have remained highly volatile in 2026, especially after the beginning of the US-Iran war. Both metals have witnessed losses, making investors question their safe-haven appeal amid a deteriorating geopolitical environment.
According to Kaynat Chainwala, AVP – Commodity Research, Kotak Securities, gold prices plunged nearly 25% to around $4,100 in late March, before rebounding to about $4,900 per ounce by mid-April amid mixed signals from Washington and Tehran. Silver followed a similarly volatile path, dropping to nearly $61 per ounce before rallying past $83, underscoring its dual nature as both a safe-haven asset and an industrial metal.
However, the market expert remains bullish on both metals, saying that their safe-haven appeal hasn’t disappeared.
On Wednesday, MCX gold June futures climbed over ₹2,000, or 1.3%, to ₹1,53,699 per 10 grams in early trade, while MCX silver May futures surged more than ₹4,700, or 2%, to ₹2,49,423 per kg.
In global markets, spot gold rose 1.1% to $4,762.22 per ounce, while US gold futures for June delivery advanced 1.3% to $4,781. Spot silver traded 2.2% higher at $78.38 per ounce.
Why have gold and silver prices remained volatile?
A steep rise in crude oil prices, coupled with ongoing uncertainty over the US-Iran war, has heightened fears of a resurgence in inflation. This has weakened expectations of near-term interest rate cuts by the US Federal Reserve, thereby exerting pressure on gold and silver prices.
According to Reuters, US Federal Reserve chair nominee Kevin Warsh stated on Tuesday that he had not made any commitment to the US President regarding interest rate cuts.
His remarks were intended to reassure US senators that, if appointed Fed Chair, he would operate independently of the White House.
Moreover, the US dollar also strengthened amid the US-Iran war, further weighing on the precious metals.
“Higher interest rates increase the opportunity cost of holding non-yielding assets like gold and silver, while liquidity stress amid war volatility prompts sales of even ‘safe’ assets for cash, a classic flight to USD amid funding squeezes, limiting upside despite ongoing uncertainty,” Chainwala said.
Gold and silver to remain safe-haven assets
Chainwala further explained that if geopolitical risks begin to weigh on global growth or trigger broader risk aversion, demand for precious metals could strengthen again.
“In this environment, gold and silver are acting more as conditional safe havens, performing better during periods of dollar weakness or growth slowdown than on geopolitical headlines alone, making them tactical, not automatic, havens in this inflationary standoff,” she said.
Meanwhile, Anuj Gupta, a SEBI-registered research analyst, also believes that gold and silver continue to be safe-haven assets amid ongoing uncertainty; however, rising crude oil prices and elevated inflation could limit any sharp rally in gold and silver, as they may prompt central banks to tighten monetary policy, he said.
According to Gupta, gold could potentially surge to the $5,000 mark, while silver may move toward the $85 level in the near term.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
