Gold and Silver Prices Rebound in India After Steep Drop; Global Uncertainty and Geopolitical Tensions Continue to Drive Market Volatility

Gold climbs after dramatic fall; Middle East conflict and U.S. Fed policy keep investors on edge

Gold and silver prices in India have seen a modest recovery after two consecutive days of significant declines. This rebound is largely attributed to global uncertainty and a weakening U.S. dollar index. In Mumbai, 22-carat gold was priced at ₹90,690 per 10 grams, while 24-carat gold stood at ₹98,940. Silver, meanwhile, traded at ₹1,07,900 per kilogram. These rates exclude making charges and the 3% GST.

What’s Driving Gold Prices Globally?

Gold had recently surged following Israel’s large-scale military assault on Iran on June 13, dubbed Operation Rising Lion. The Israeli attack, which targeted Iran’s nuclear and military infrastructure, came as a response to an earlier Iranian drone and missile strike. These developments fueled investor fears and pushed gold prices higher as a safe-haven asset.

However, a brief ceasefire announcement between the two nations caused gold prices to fall sharply. On June 25, international spot gold prices declined by nearly 2%, reaching a two-week low of $3,316.80 per ounce, even dipping below $3,300 during intraday trading. U.S. gold futures also fell to $3,333.90 down about 2%.

According to senior analyst at Zaner Metals, easing tensions in the Middle East have reduced immediate demand for gold. “Risk appetite is returning,” he noted, as investors begin to shift capital back toward equity markets and riskier assets.

Despite the recent decline, analysts believe gold will find strong support around $3,250–$3,300. However, if hostilities resume, prices could surge again. Israeli defense officials have hinted at potential renewed missile strikes on Tehran, putting the ceasefire into question.

Fed Signals Hold on Rate Cuts

Another factor impacting gold prices is the U.S. Federal Reserve’s stance on interest rates. Fed Chair Jerome Powell recently stated that there is no urgency to reduce rates, contrary to earlier market expectations of a possible cut starting in October. Powell emphasized the need to first assess the full impact of previous hikes on inflation and the broader economy.

Silver, Platinum, and Palladium Market Update

Silver also fell by 0.8% to $35.83 per ounce. In contrast, platinum rose 1.8% to $1,317.87, while palladium dropped 1.3% to $1,062.73.

Forecast: Will Gold Prices Rise Again?

Experts suggest that in the coming 1–2 months, gold prices could rise by 8–10%, provided geopolitical tensions escalate or global economic uncertainty persists. Over the next year, average gold prices are expected to remain in the $2,750–$2,800 per ounce range. However, if peace holds and inflation stabilizes, prices could slip back to the $2,400 level. Currently, international prices are hovering near $3,400—indicating a potential 17% to 30% correction.

Domestic Impact

In India, domestic gold rates mirror global price movements and are further influenced by import duties, currency fluctuations, and local demand. Experts note that even a minor dip in international prices can significantly affect Indian rates, especially during the wedding and festival season, when demand traditionally surges.

While gold is considered a cultural and financial cornerstone in India, especially for long-term investment and gifting, current volatility demands cautious optimism. Analysts advise tracking geopolitical developments and central bank signals before making large-scale purchases or investments.