Are Gold and Silver Prices Soaring Due to Geopolitical Tensions?
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Synopsis
As geopolitical tensions mount, gold and silver prices have reached historic highs. With market analysts predicting more US rate cuts, investors are flocking to these safe-haven assets. Discover what is driving these price surges and what it means for the market in 2026.
Key Takeaways
- Gold prices surged due to geopolitical tensions.
- Expectations of US rate cuts are driving demand.
- Silver prices reached historic highs.
- Central bank buying supports precious metal prices.
- Market analysts predict continued volatility in 2026.
New Delhi, Dec 26 (NationPress) Gold prices have risen more than 0.5 percent to reach all-time highs on Friday, driven by escalating geopolitical tensions and anticipations of additional US rate reductions next year.
MCX gold February futures increased by 0.72 percent, hitting a remarkable Rs 1,39,091 per 10 grams, while MCX silver March futures soared 3.56 percent to an unprecedented Rs 2,31,759 per kg as of 10:10 AM. Earlier in the day, silver futures had achieved an intraday peak of Rs 2,32,741 per kg.
The primary catalyst for the surge in gold prices is the growing tensions between the US and Venezuela. International markets have also seen a rise in bullion, with spot gold climbing 0.5 percent to $4,501.44 per ounce by 02:09 Greenwich Mean Time (GMT), after previously reaching $4,530.60.
Market participants are factoring in two quarter-point interest rate cuts by the Federal Reserve in 2026, as inflation appears to be easing and labor market conditions are becoming less robust. This, coupled with the demand for safe havens due to heightened geopolitical anxieties, has led to increased defensive buying.
Geopolitical tensions have escalated due to the US's blockade of Venezuelan oil, ongoing hostilities between Russia and Ukraine, and US military actions against ISIS in Nigeria. Recently, the US Coast Guard confiscated a supertanker under sanctions that was transporting Venezuelan oil and attempted to intercept two more vessels linked to Venezuela over the weekend, intensifying the situation.
“The support for gold is bolstered by central bank purchases and steady inflows into ETFs. Gold has support levels at Rs 1,36,550-1,35,710 and resistance at Rs 1,38,850-Rs 1,39,670. Silver’s support levels are at Rs 2,22,150-Rs 2,20,780 while resistance levels sit at Rs 2,25,810- Rs 2,26,970,” stated Rahul Kalantri, VP of Commodities at Mehta Equities Ltd.
Analysts have noted that strong central bank buying, expectations of Fed rate cuts, concerns regarding the impact of US tariffs, rising geopolitical tensions, and robust inflows into gold and silver ETFs have all contributed to the upward trajectory of gold and silver prices this year.
Point of View
It is essential to recognize how geopolitical issues and economic forecasts intertwine. As a national editor-in-chief, I believe it is crucial for investors to stay informed about these developments, which could significantly impact financial markets and future investment strategies.
NationPress
20/01/2026
Frequently Asked Questions
What factors are driving gold and silver prices higher?
The primary factors include rising geopolitical tensions, expectations of US rate cuts, and increased central bank buying.
How have geopolitical tensions affected the market?
Heightened tensions, especially between the US and Venezuela, have driven demand for safe-haven assets like gold and silver.
What are the current price levels for gold and silver?
As of now, gold is priced at Rs 1,39,091 per 10 grams, while silver is at Rs 2,31,759 per kg.
What should investors consider in this market environment?
Investors should monitor geopolitical developments and Federal Reserve actions, as these will significantly impact gold and silver prices.
Are there any predictions for future rate cuts?
Market analysts are pricing in two quarter-point rate cuts by the Federal Reserve in 2026 due to cooling inflation and a softening labor market.
