Mumbai: Gold and silver prices recorded a strong jump in the domestic market on Wednesday. Silver prices surged by Rs 11,000 to Rs 2,51,000 per kilogram, marking nearly a 5 percent rise in a single day. Gold also gained Rs 3,200 to reach Rs 1,56,400 per 10 grams, showing steady upward momentum.
Ceasefire lifts market sentiment
The main reason behind the rally is the two-week ceasefire agreement between the US and Iran. The pause in conflict reduced global uncertainty and improved investor confidence. This triggered buying across financial markets, including precious metals.
Global cues support the rally
International prices also moved higher. Spot gold rose over 2 percent to around $4,803 per ounce, while silver gained nearly 6 percent to $77 per ounce. Analysts said the fall in crude oil prices and a weaker US dollar made gold and silver more attractive for investors.
Why investors are buying gold and silver?
With oil prices dropping sharply after the ceasefire news, fears of rising inflation have eased. This reduces the chances of interest rate hikes by central banks like the US Federal Reserve. Lower rates generally support gold prices, leading to increased demand.
Earlier pressure now easing
During the conflict, gold’s safe-haven demand was limited as investors sold bullion to cover losses in other markets. Now, with stability returning, fresh buying has pushed prices higher.
Risks still remain
Experts caution that the rally may not last long. The ceasefire is temporary, and uncertainty around the Strait of Hormuz still exists. Any fresh tension or breakdown in the agreement could quickly reverse the gains in gold and silver prices.
