A dramatic escalation in the Middle East over the weekend has jolted global risk sentiment. Israel attacked Iran on Saturday, with reports indicating that a United States strike followed. According to media reports, Iran’s Supreme Leader Ayatollah Ali Khamenei was killed in the assault — a development that throws the political future of the Islamic Republic into uncertainty and heightens the risk of broader regional instability.
With global as well as Indian stock markets and commodity closed when the news broke, investors will be reacting in real time when trading resumes on March 2. Investors wonder how gold, silver and India’s Nifty index will openon Monday.
Gold & Silver: Gap-Up Opening Likely
Safe-haven demand typically surges during geopolitical crises, and this episode appears no different. Commodity analysts expect bullion to react sharply at the open.
Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities, said:
“Gold and silver prices are set to remain highly volatile with gap up on the opening session tomorrow as the Middle East conflict involving renewed U.S. and Israeli military action against Iran continues to dominate global risk sentiment.”
He added that coordinated strikes and retaliatory risks have sharply reduced hopes of an immediate diplomatic resolution, pushing investors toward traditional hedges.
“A sharp escalation in hostilities, with coordinated strikes and retaliatory moves fueling uncertainty and diminishing hopes of a quick diplomatic resolution. This elevated geopolitical risk can drive investors toward traditional safe-haven assets like gold and silver.”
In recent sessions, bullion had already shown upward momentum amid rising tensions. That trend may accelerate if global markets remain risk-averse. Historically, whenever conflict risks intensify — particularly in oil-producing regions — gold benefits from capital rotation out of equities.
Crude oil is another key variable. Fears of supply disruption, especially through the Strait of Hormuz, have lifted energy prices. Higher crude not only increases inflation expectations but also amplifies defensive positioning in precious metals.
Trivedi cautioned, however, that the spike may not be one-directional.
“However, the impact may not be uniform — if over the weekend there are diplomatic developments or indications of de-escalation, precious metals could see profit-taking after an initial spike of 3–6%.”
In other words, gold and silver could open sharply higher, potentially by 3–6%, but volatility is likely to remain elevated throughout the session.
What to expect from Nifty 50, Sensex at opening bell?
While bullion may shine, equities are expected to face immediate pressure global as well as at home.
Indian stock markets benchmarks Nifty 50 and Sensex are likely to open with a significant gap-down as the escalation in the US–Iran conflict weighs on global sentiment. Dalal Street is particularly sensitive to crude price movements, given India imports roughly 85% of its oil needs.
V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, warned:
“The near-term impact will be negative. Crude has spiked and if the crude price remains high for an extended period of time, our balance of trade and balance of payments will be impacted since we import around 85% of our oil requirements.”
He further noted that while OPEC Plus could attempt to stabilise prices by increasing output, any closure of the Strait of Hormuz — even temporarily — could trigger another surge in oil. He suggested that if the strait were blocked and forcefully reopened, it would require boots on the ground, which could escalate tensions further.
For the Nifty, this means an initial wave of selling is likely, especially in sectors sensitive to oil prices such as aviation, paints, logistics and OMCs. Banking and financials may also see pressure if foreign institutional investors reduce exposure amid global uncertainty.
What to Expect at the Open
Gold: Likely sharp gap-up, driven by safe-haven demand and oil spike.
Silver: Positive opening expected, potentially mirroring gold’s move but with higher volatility.
Nifty: Anticipated big gap-down opening amid risk-off sentiment and crude concerns.
The first hour of trade on Monday could be highly volatile across asset classes. While bullion may benefit immediately, equity markets will closely track crude prices and any signs of diplomatic movement.
The direction after the initial reaction will depend on whether tensions escalate further — or cool just as quickly.
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.
