As the smoke clears from a first wave of joint U.S.-Israeli airstrikes on Tehran, another kind of fever is taking hold of financial centers around the world. Commodity experts and market analysts are preparing for a “monster gap-up” in gold and silver prices when trading resumes on Monday as investors rush to hedge against what President Donald Trump has described as “major combat operations” in the Middle East.
Bullion as the Absolute Hedge For War
Gold has been the major beneficiary of geopolitical upheaval throughout history and the recent uptick is no different. Spot gold was already testing resistance at $5,250 per ounce before the weekend strikes. Now, with Iran delivering retaliatory ballistic missiles and the UAE reporting interceptions over Abu Dhabi, analysts calculate that this psychological hurdle of $5,300 will be broken within minutes of Monday’s open of the market.
“We’re entering a phase of ‘debasement trade’ in which traditional currencies and equities are being dumped or at least depreciated, with hard assets driving them higher,” says Anuj Gupta, a commodity expert registered with SEBI. “The US-Iran war buzz is fueling extreme uncertainty.
Technical Outlook: The ‘Gap-Up’ Perspective
Market technicals say the strikes’ “preemptive” nature has taken many short investors by surprise. Several key factors will lead to the projected explosion:
- Safe-Haven Rotation: Major institutional flight from “AI-heavy” tech shares to long-duration Treasuries and bullion.
- Currency Volatility: Easing Dollar Index (DXY) as the market weighs the long-term cost of a major Middle Eastern conflict on the U.S. budget deficit.
- Silver’s Industrial/Safe-Haven Dual Play: Silver Following as a Gold Rival: A gold-like player, silver in the industrial supply chain can break into the $100 mark if the war rips supply chains in the Gulf.
Impact on Indian Market (MCX)
The timing of the strikes in India over a weekend means that domestic Multi Commodity Exchange (MCX) is expected to open with a major hike on Monday morning. Traders are advised to "sell-on-rise" equities and maintain a "buy-on-dips" stance in gold.
The Indian stock market saw "sharp selling on Friday," said Avinash Gorakshkar, a fundamental equity analyst. ” Although equities may follow a choppy, sideways-to-negative trajectory, bullion is the undisputed winner of this geopolitical jolt.
The "Nuclear" Variable
The most powerful reason for the current “war premium” this time is Iran’s nuclear targets in particular. Prime Minister Netanyahu’s confirmation that the strikes were to thwart a “murderous terrorist regime” from acquiring atomic weapons has added a level of system-wide risk that traditional valuation models are not able to price in.
So if the "Nerve Center" of the Middle East is a fighting ground, the gold rally is likely to keep its pace, acting as the most reliable indicator of global anxiety around.
