Gold Prices – Bullion Recovers as Global Tensions Lift Demand

Gold Prices –  Gold and silver prices regained momentum on February 20 after witnessing a sharp correction in late January that unsettled investors across commodity markets.

After delivering strong returns for several months, bullion prices had slipped abruptly toward the end of January, erasing part of their earlier gains. The unexpected drop triggered concern among traders, especially those who had entered near peak levels. Although prices are yet to revisit record highs, the latest trading sessions indicate renewed strength in both metals.

At around 1:30 pm on February 20, gold futures on the Multi Commodity Exchange were trading at Rs 1,55,809 per 10 grams, marking a rise of Rs 990 or 0.67 percent. Silver futures were quoted at Rs 2,45,277 per kilogram, up Rs 3,884 or 1.61 percent during the session.

Rising Global Risks Revive Safe-Haven Buying

Market participants attribute the rebound largely to escalating geopolitical concerns, particularly heightened tensions between the United States and Iran. Historically, periods of global uncertainty have prompted investors to shift funds toward assets considered relatively stable, with gold and silver often benefiting from that shift.

Hareesh V, Head of Commodity Research at Geojit Investments Limited, noted that increasing strain between Washington and Tehran has encouraged investors to seek safety in bullion. According to him, precious metals tend to attract capital during times of geopolitical stress because they are viewed as stores of value and protective hedges against currency volatility and financial market instability.

He cautioned, however, that external factors such as movements in the US dollar and evolving expectations around interest rates could moderate the pace of gains. A stronger dollar typically makes gold more expensive for holders of other currencies, which can limit upside momentum. Nevertheless, he said sustained uncertainty could keep demand for safe-haven assets elevated in the near term.

In practical terms, as long as geopolitical tensions remain unresolved, bullion is likely to retain investor interest.

Gold Attempts to Find Firm Ground

Gold’s recent bounce follows one of its sharpest short-term corrections in recent memory. The decline had prompted many market watchers to reassess entry levels. The current recovery suggests that buyers stepped in when prices softened, viewing the correction as an opportunity.

Aksha Kamboj, Vice President of the India Bullion & Jewellers Association and Executive Chairperson at Aspect Global Ventures, said the rebound reflects renewed confidence after aggressive selling pressure earlier. She observed that investors appear to be returning gradually as price levels become more attractive.

Kamboj added that while price swings remain noticeable, broader sentiment toward gold has not deteriorated significantly. In her assessment, the metal could consolidate in the short term as markets digest global developments and recalibrate expectations around monetary policy.

Silver Mirrors Recovery but Faces Sharper Swings

Silver, which typically experiences more pronounced price movements compared to gold, also endured a significant sell-off before staging its recovery. Its current uptrend is being supported by renewed participation and short covering in the futures market.

According to Kamboj, silver’s rebound indicates fresh buying interest, though traders should be prepared for continued volatility. Because silver is influenced not only by safe-haven demand but also by industrial consumption trends, it tends to react more sharply to changes in overall market sentiment. If international cues remain supportive, the metal could extend its recovery in the coming sessions.

Investment Approach in a Volatile Phase

With prices climbing again, investors are weighing their next steps. Analysts suggest that those with a long-term horizon may consider maintaining exposure to gold as part of a diversified portfolio. The metal has historically functioned as a hedge during uncertain economic or geopolitical periods.

Existing investors are generally advised to avoid reacting impulsively to short-term fluctuations. For new entrants, staggered purchases rather than lump-sum investments may help manage risk amid ongoing volatility.

Short-term traders, especially in silver, should exercise caution. While rapid gains are possible during volatile phases, sharp reversals can occur just as quickly.