Gold surges Rs 7,000, near Rs 1.7 lakh mark after Israel-Iran war. Perfect time to invest in yellow metal?

Gold prices surged up to 4%, or Rs 6,700, to trade at Rs 1.68 lakh per 10 grams on the MCX on Monday after the United States and Israel carried out major strikes on Iran, killing its Supreme Leader Ali Khamenei. The escalation sharply boosted safe-haven demand for precious metals amid mounting geopolitical tensions and deepening global economic uncertainty.

After witnessing a steep correction last month due to multiple factors, the latest rally leaves the yellow metal just 12% below its record high of Rs 1,93,096. In the international market, spot gold rose 1.9% to $5,376.44 an ounce, after touching its highest level in more than four weeks. Earlier in the session, bullion had advanced as much as 2%.

“Gold is perhaps the finest barometer of global uncertainty and, to mix metaphors, the mercury is rising. We should expect gold to be repriced higher to fresh records as we enter a whole new era of geopolitical uncertainty,” independent analyst Ross Norman told Reuters.


Kyle Rodda, senior financial market analyst at Capital.com, said that unlike previous flare-ups in the conflict, there appears to be a strong incentive on both sides to continue escalating, raising the risk of a chaotic and prolonged period of uncertainty. “The dynamic for gold is pretty positive,” he added.

Gold extended last week’s gains as intensifying geopolitical tensions reinforced safe-haven buying, while lingering uncertainty over President Trump’s tariff stance added another layer of macro risk.

Markets quickly shifted into risk-off mode, amid concerns that a broader conflict could destabilise the Middle East and disrupt crude flows through the Strait of Hormuz, a critical artery for global energy supplies.

What should investors do?

Ponmudi R, CEO of Enrich Money said that MCX Gold futures are trading in the Rs 1,65,000–1,70,000 range after consolidating post the sharp correction from all-time highs. While price currently in short-term consolidation with a positive tilt, holding firm above critical support zones. Robust buying interest persists in the Rs 1,58,000–1,62,000 demand band following the recent surge driven by Middle East tensions. A sustained hold above this base, followed by a breakout above 1,65,000, may revive momentum toward 1,70,000–1,75,000, preserving a bullish medium-term perspective.

Further, Jigar Trivedi of IndusInd Securities said that the rally has also been supported by strong central bank purchases and a broader investor move away from sovereign bonds and currencies. MCX Gold April futures may appreciate Rs. 164,000/10g and on a flip side Rs 160,000/10g is a floor.

Investors now turn to key manufacturing PMI releases from major economies today, while broader direction this week will hinge on U.S. labor market data for cues on growth resilience and Federal Reserve policy expectations.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)