Quick overview

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The latest fundamentals in the precious metal market showed silver prices could rise back above $100 if there is a significant buying frenzy due to high geopolitical risks.

The joint US-Israeli attack on Iran has increased geopolitical risks, damaged investors’ already low risk tolerance, and increased the price of commodities like gold, silver, and crude oil. US gold futures ended Friday at $5,267.20 per troy ounce, up 1% for April delivery and 11% for February.

Gold prices increased on the futures market for the eighth consecutive month. May silver futures ended Friday at $93.64 per troy ounce, up 6.5 percent.

For the tenth consecutive month, the white metal increased by over 18%  in February.
Gold was trading at $5,296 per ounce on the Comex, while spot silver was up 7.85 percent to 93.82 per ounce.

Gold tends to rise quickly because gold is viewed as a store of value when the world seems unstable. Silver follows, but because it has both industrial and investment demand, its movements can be a little more erratic.

In the short term, prices frequently rise as news breaks and traders scramble to reduce risk. However, markets level off over time, and if tensions subside, prices might decline. Therefore, the initial impact is frequently intense and emotional, motivated by fear and a desire for protection, before fundamentals and more general economic considerations regain control.

Markets would anticipate that the current rally in gold, silver, and oil would continue. Higher crude oil prices usually have a greater effect on India: they increase the country’s current account deficit, fuel domestic inflation, put pressure on the rupee, and may cause FII outflows as foreign investors lower their risk exposure.