Precious metals began the new trading week with a powerful rally, as fresh geopolitical turmoil triggered a flight to safety among investors. Gold and silver prices in India witnessed sharp gains during Monday's session, fueled by a dramatic escalation in tensions between the United States and Venezuela.
Metals Shine on MCX as Geopolitical Fears Spike
The February gold futures contract on the Multi Commodity Exchange (MCX) opened stronger at ₹1,36,300 per 10 grams, compared to the previous close of ₹1,36,761. The momentum continued, pushing prices to an intraday peak of ₹1,38,200, marking a significant surge of ₹2,439.
By 8:10 PM IST, MCX gold was trading firmly higher at ₹1,37,798 per 10 grams, up by ₹2,037 or 1.50%. In the international spot market, gold prices also climbed robustly, rising 2.3% to reach $4,425 per ounce.
The rally was not confined to gold. Silver prices, which had ended flat in the previous session, exploded upwards. The March silver futures contract on MCX witnessed a staggering jump, soaring by ₹13,584 per kilogramme. It hit a day's high of ₹2,49,900, rocketing from its prior close of ₹2,35,873.
The bullish sentiment extended across the precious metals complex. Platinum and palladium joined the uptrend, registering impressive gains of 5.3% and 5% respectively during the session.
US Military Action in Venezuela Fuels Safe-Haven Rush
The primary catalyst for the surge in safe-haven assets was a major geopolitical development over the weekend. United States forces conducted a military operation in Venezuela that resulted in the capture of the country's President, Nicolás Maduro, and his wife.
The detained leader was reportedly taken to New York and charged with crimes including narco-terrorism conspiracy. This action has injected severe uncertainty into global markets, reviving fears of prolonged instability.
Addressing the nation on Saturday, US President Donald Trump stated that Washington would "run" Venezuela until a political transition is achieved. This announcement came hours after US forces bombed the South American nation. President Trump also indicated that US oil companies would invest billions to repair Venezuela's damaged oil infrastructure, aiming to extract its vast crude reserves.
Adding to the tense atmosphere, Reuters reported that President Trump issued a warning about a potential second military strike on Venezuela if remaining members of the administration there fail to cooperate with US-led efforts to "fix" the country.
Market Outlook and Investor Guidance
Venezuela, despite sitting on some of the world's largest oil reserves, has been crippled by economic collapse and hyperinflation for years. The latest military intervention and the resulting political vacuum have significantly heightened geopolitical risks globally. This environment traditionally benefits assets perceived as stores of value during times of crisis.
The sharp upmove in gold and silver prices underscores how quickly global events can impact commodity markets. The situation remains fluid, and further developments in the US-Venezuela standoff are likely to continue driving volatility in precious metals. Analysts suggest that the safe-haven demand could sustain in the near term as the world assesses the long-term implications of this conflict.
Disclaimer: The views and investment tips expressed are for reference purposes only. We strongly advise investors to consult with certified financial experts and conduct their own research before making any investment decisions.
