Why Are Gold and Silver Prices Rising Amid Geopolitical Tensions?
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Synopsis
In response to geopolitical upheaval, gold and silver prices have skyrocketed, reflecting a surge in safe-haven demand. The recent actions of the US against Venezuelan President Maduro have intensified market reactions, prompting investors to seek shelter in precious metals. Discover how these developments influence global markets and potential price movements.
Key Takeaways
- Gold prices surged to Rs 1,37,750 per 10 grams.
- Silver prices rose to Rs 2,43,223 per kg.
- Safe-haven demand increased due to geopolitical tensions.
- Price fluctuations are influenced by US Federal Reserve policy expectations.
- Investors should stay informed about market indicators.
New Delhi, Jan 5 (NationPress) The prices of gold and silver saw a significant surge on Monday, driven by heightened demand for safe havens following the United States' actions against Venezuelan President Nicolas Maduro over the weekend.
As of 1:30 p.m., MCX gold futures for February were up by 1.47%, trading at Rs 1,37,750 per 10 grams, while MCX silver for March witnessed a 2.92% increase, reaching Rs 2,43,223 per kg. However, both metals are still short of the record highs set in December 2025, which were Rs 1,40,465 for gold and Rs 2,54,174 for silver.
During intra-day trading, MCX futures had hit higher marks but were unable to maintain those levels. The price for 24-carat gold was noted at Rs 1,35,721 on Monday, an increase from Rs 1,34,415 from the previous closing, according to the India Bullion and Jewellers Association (IBJA).
Meanwhile, US spot gold surged by 1.5% to $4,395.35 per ounce, with February futures rising above $4,418 per troy ounce.
The US's intervention in Venezuela has added to existing factors affecting bullion prices, including uncertainty surrounding the Russia-Ukraine peace talks, anticipated rate cuts from the US Federal Reserve, and increasing retail demand. Additionally, the rupee's decline against the dollar has supported domestic prices.
The prospects for peace between Russia and Ukraine have become murky after Russia reported a drone attack on the President’s residence. Analysts suggest that ongoing geopolitical tensions and safe-haven buying could bolster prices at lower levels.
"Gold has support at Rs 1,35,550-1,34,710 and resistance at Rs 1,38,150-1,39,100. Silver holds support at Rs 2,33,150-2,31,780 and resistance at Rs 2,37,810 and 2,39,970," an analyst stated.
Investors are also looking forward to economic indicators such as the ISM Manufacturing data from the US, ADP employment figures, JOLTS job openings, and the non-farm payroll report, which could shed light on future Fed rate decisions.
In CY25, gold prices soared nearly 66%, surpassing $4,500 per ounce, while silver outperformed with a remarkable 171% increase, driven by safe-haven demand, aggressive central bank purchases, and rising industrial shortages.
Point of View
I emphasize the importance of understanding the broader implications of geopolitical events on financial markets. The recent surge in gold and silver prices underscores the critical role that safe-haven assets play during uncertain times. Investors must stay informed and prepared to make strategic decisions as these dynamics unfold.
NationPress
06/01/2026
Frequently Asked Questions
What factors are driving the rise in gold and silver prices?
The rise in gold and silver prices is primarily driven by safe-haven demand due to geopolitical tensions, particularly the US's intervention in Venezuela, along with uncertainty surrounding the Russia-Ukraine peace talks and expectations of rate cuts from the Federal Reserve.
How do geopolitical events impact precious metal prices?
Geopolitical events create uncertainty in the markets, leading investors to seek safe-haven assets like gold and silver. Such demand often results in price increases as traders react to perceived risks.
What are the current prices of gold and silver?
As of the latest updates, gold is priced at Rs 1,37,750 per 10 grams, and silver is at Rs 2,43,223 per kg.
How significant are the recent price movements?
The recent price movements are significant as they indicate heightened investor sentiment towards safe-haven assets, reflecting concerns over geopolitical tensions and potential economic instability.
What should investors consider in this market?
Investors should closely monitor geopolitical developments, economic indicators, and central bank policies, as these factors can significantly influence precious metal prices.
