Israel-Hamas War: Impact on Precious Metals Market

The Israel-Hamas war, now on its 20th day, captures global attention and affects commodity markets unexpectedly. The rising tension in the Middle East is fueling geopolitical uncertainties, which have reverberated in the prices of precious metals. The Israel-Hamas war’s impact on gold and silver prices has defied conventional market expectations, as explored in this article.

Israel-Hamas War: Gold Amidst Geopolitical Uncertainty

Gold, often considered a haven during times of uncertainty, has seen its prices surge. On the Multi Commodity Exchange (MCX), gold futures for December opened at ₹60,824 per 10 grams. Therefore, within minutes of the market’s opening, it reached an intraday high of ₹60,968 per 10 grams. In the international market, spot gold hovers around $1,988 per ounce. Gold remains resilient despite the rise in US Treasury yields and the US dollar.

Anuj Gupta, Head of Commodity & Currency at HDFC Securities, explains, “MCX gold rates are rising due to uncertainties associated with the Israel-Hamas war. This geopolitical tension has entered its 20^th day since its outbreak on October 7, 2023, and the Middle East has yet to find any truce or conclusive outcome.”

Silver: Following Gold’s Lead

Silver, often called “poor man’s gold,” mirrors the trend. On MCX, silver rates opened higher at ₹71,799 per kilogram, reaching an intraday high of ₹71,896 per kilogram during the opening bell. Silver prices are hovering around $22.95 per ounce in the international market. Silver prices are increasing alongside gold, indicating investor interest in precious metals amid geopolitical turmoil and uncertainty.

In conclusion, the Israel-Hamas war’s impact on the global commodities market is a stark reminder of how international conflicts can have far-reaching economic consequences. Geopolitical events have outshone US Treasury yields and a stronger dollar, underscoring the intricate link between uncertainty and commodity prices. The Israel-Hamas conflict’s unfolding impact on the precious metals market reflects the global quest for safe investments during uncertain times.