Gold and silver prices increased in India's retail market on Tuesday, July 21, as tensions between the United States and Iran escalated. The price of 24-karat gold rose by 0.61% to ₹142,890 per 10 grams, while 22-karat gold also saw a similar uptick. Silver prices followed suit, with MCX silver futures trading 1.25% higher at ₹221,330 per kg around 9:13 AM.
Key Details
The rise in precious metal prices comes amid heightened geopolitical tensions. US President Donald Trump stated that Iran would be held accountable for the deaths of three US service members, contributing to market uncertainty. Additionally, Houthi militants in Yemen announced a maritime embargo on Saudi Arabia, further complicating the situation in the region. Oil prices also reflected these tensions, with Brent crude futures gaining approximately 1.3% to close at $89.22 per barrel, and US West Texas Intermediate crude futures rising 0.9% to settle at $83.23 per barrel.
Background
The ongoing conflict has led to a significant reduction in vessel traffic through the Strait of Hormuz, a crucial energy corridor. Shipowners are increasingly avoiding the area due to the risks associated with renewed hostilities. Reports indicate that crossings through the Strait have declined sharply, as operators reassess the safety of entering the Gulf following Iran's declaration of a maritime traffic ban and recent attacks on commercial vessels.
The rise in gold and silver prices is likely to attract investors seeking safe-haven assets amid geopolitical instability, while oil prices may continue to be volatile due to supply concerns stemming from the US-Iran conflict. Investors will watch for further developments in the region and any potential diplomatic efforts to de-escalate tensions, particularly during US Secretary of State Marco Rubio's scheduled visit to Manila this week for meetings regarding regional security issues.