Gold and silver prices in Mumbai have climbed sharply in recent days, driven by the ongoing Iran-US and Israel conflict. On March 2, domestic gold touched around Rs. 1,69,000 per 10 grams on the MCX amid heightened safe-haven demand. Silver followed suit, rallying to near Rs. 2,96,000 per kilogram. Traders watched international spot gold surge past $5,300 an ounce before easing slightly. The rupee’s movements and central bank buying added to the momentum. Yet prices have shown some cooling lately, with profit-taking and a firmer dollar at play. Will the rally hold, or is a correction on the cards?
Geopolitical Tensions Drive Safe-Haven Flows
The clashes in the Middle East remain front and centre. US and Israeli strikes on Iranian targets have raised fears of a drawn-out conflict, possibly disrupting oil supplies through key routes. This has sent investors scrambling for gold as a hedge against uncertainty. Spot gold hit highs near $5,400 in recent sessions, though it has pared back to the $5,100-$5,200 range amid mixed signals. In India, cultural demand for gold during festivals and weddings layers on top of this global push. Households and jewellers are stepping up purchases, keeping local premiums firm.
Mumbai Traders Share Cautious Forecasts
Bullion dealers in Zaveri Bazaar are watching closely. Some predict gold could test Rs. 1,80,000 per 10 grams if tensions escalate further, with international levels potentially nearing $6,000 in extreme scenarios. Others note resistance around current highs and suggest prices might stabilise between Rs. 1,60,000 and Rs. 1,70,000 unless fresh triggers emerge. Silver, more volatile, could push higher too, perhaps to Rs. 3 lakh per kg on industrial and investment demand. But a few mention possible selling from smaller countries needing funds for defence, which might limit upside. It’s tense out there.
Historical Parallels Offer Perspective
Past events give some clues. During the 1979 Iranian Revolution, gold rose sharply over months as oil prices spiked. The 1990 Gulf War brought a quicker but shorter-lived jump of around 10-15 per cent. Those rallies eventually faded once resolutions appeared. This time feels different with broader global stakes, but history reminds us spikes don’t always last forever.
What Investors Should Consider Now
For everyday buyers, experts advise caution. Long-term holders might ride it out given strong fundamentals like central bank purchases. New entrants could wait for dips of 5-10 per cent before jumping in gradually. The gold-silver ratio sits around 60 right now. That suggests silver looks relatively cheap if it breaks higher. Booking some profits feels sensible with recent volatility, though holding could reward patience. It’s tricky deciding when to act in all this noise.
Wider Economic Ripples
The tensions aren’t just about metals. Oil prices have jumped on supply worries, hitting India’s import bill hard and feeding into inflation. A softer dollar helps bullion somewhat, but rupee weakness makes imports costlier. Stock markets feel the pressure too, with risk-off sentiment pushing more money into safe assets. Everything links up in unexpected ways.
Looking Ahead: More Volatility Likely
If the conflict drags on, fresh highs seem possible by mid-2026. Signs of de-escalation could spark quick pullbacks, as seen in recent sessions. Mumbai’s bullion scene stays resilient, adapting to whatever comes next. For now, eyes are glued to developments abroad.
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