Quick Read
- COMEX gold prices surged over 2.50% to $5,400 an ounce on Monday, March 2, 2026.
- The surge is attributed to escalating military conflict in the Middle East involving the US, Israel, and Iran.
- Iran launched missile barrages across the region following US and Israeli strikes that killed Supreme Leader Ayatollah Ali Khamenei.
- Global stock markets fell sharply, while defense and oil stocks gained.
- Experts predict gold could reach $6,000 globally in an extreme scenario, with continued high volatility.
Global gold and silver prices experienced a sharp surge on Monday, March 2, 2026, driven by an intensifying military conflict in the Middle East involving the United States, Israel, and Iran. The escalating tensions have triggered a pronounced risk-off sentiment among investors, prompting a rapid rotation of capital into traditional safe-haven assets like precious metals.
On the COMEX, gold rates hit $5,400 an ounce, marking an intraday increase of over 2.50%. Similarly, COMEX silver prices opened with an upside gap, touching an intraday high of $96.930 per ounce, logging a 2% rise within minutes of the opening bell. In India, MCX gold futures gained ₹7,776 per 10 grams to reach ₹1,69,880, while MCX silver futures rose by ₹15,155 per kilogram, hitting ₹2,97,799, its highest level since late January.
Middle East Conflict Fuels Gold Price Surge
The latest surge in precious metal prices follows a weekend of heightened hostilities. Coordinated US and Israeli strikes on Iran, which reportedly included attacks on nuclear sites and military installations, led to the death of Iran’s Supreme Leader Ayatollah Ali Khamenei. In retaliation, Tehran launched missile barrages across the region, targeting Israel, US military assets, and strategic sites in Saudi Arabia, Qatar, the United Arab Emirates, Kuwait, and Bahrain, according to Kotak Securities AVP — Commodity Research, Kaynat Chainwala. These actions have significantly escalated fears that the conflict could widen, potentially drawing in neighboring countries and disrupting global trade flows, particularly through the Strait of Hormuz.
The US has bolstered its military presence, with the USS Gerald R. Ford aircraft carrier near the mouth of the Mediterranean Sea and a second American aircraft carrier drawing closer to the Middle East. President Donald Trump indicated that military operations could extend for “four to five weeks,” though he also suggested that sanctions relief might be possible if Iran’s new leadership signals a willingness to engage constructively. However, Iran’s Supreme National Security Council Secretary Ali Larijani denied any intent to restart US talks on Monday, signaling no near-term dialogue. This uncertainty contributes to the heightened risk premium in financial markets.
Global Markets React to Escalating Tensions
The geopolitical escalation compounded an already fragile backdrop for global equities. The US stock market opened Monday’s session sharply lower, with the Dow Jones Industrial Average falling 1.2% and the S&P 500 declining 1.2%. European shares also fell across the board, with the pan-European STOXX 600 dropping 1.8% to its lowest since mid-February. Travel and leisure stocks, including airlines like Delta Airlines, United Airlines, and Lufthansa, saw significant declines due to flight suspensions and broader uncertainty. Big banks such as Bank of America and Citigroup also slid over 2% each.
Conversely, sectors perceived to benefit from conflict saw gains. Defense stocks received a boost, with Lockheed Martin and RTX Corporation gaining 7% each, while Kratos rose 10% and AeroVironment was up 13% in pre-market trade. Oil companies Occidental Petroleum and ConocoPhillips added over 6% each, as concerns over crude oil supply disruptions through the Strait of Hormuz added to inflationary fears, further supporting bullion prices.
Expert Outlook: Volatility and Potential New Highs for Gold
Market analysts widely agree that increased geopolitical risks are the primary driver behind the current rally in precious metals. Hareesh V, Head of Commodity Research at Geojit Investments, suggested that gold could move towards $6,000 globally or ₹2,00,000 domestically in an extreme scenario, depending on how the conflict develops. Ponmudi R, CEO of Enrich Money, noted strong buying interest in the $5,100–$5,200 support band, adding that a sustained breakout above $5,500–$5,600 could open the path toward fresh record highs.
Despite a stronger US dollar and fading expectations of aggressive Federal Reserve rate cuts, safe-haven demand is currently outweighing traditional headwinds, according to Gaurav Garg, Research Analyst at Lemonn Markets Desk. He expects volatility to remain elevated, with gold potentially testing ₹1,70,000 per 10 grams and silver approaching ₹3,00,000 per kg in the near term if escalation continues. However, any diplomatic breakthrough could prompt sharp profit-booking given the rapid rally.
The Bank of Japan Deputy Governor Ryozo Himino stated that the central bank is expected to keep raising interest rates, emphasizing the need to scrutinize various data in determining the timing for the next hike, even as the Middle East conflict heightened uncertainty over the economic outlook, as reported by Reuters.
Silver’s Unique Volatility and Investment Considerations
Silver, while tracking gold’s upward trajectory, exhibits greater volatility due to its dual role as both a precious and industrial metal. Harshal Dasani, Business Head at INVasset PMS, explained that in times of uncertainty, silver benefits from risk hedging, but it also remains tied to structural themes like electrification, solar expansion, and industrial recovery. This dual nature makes it more volatile but potentially more explosive during stress cycles. Ross Maxwell, Global Strategy Operations Lead at VT Markets, noted that if gold continues higher, silver could outperform in percentage terms, though it remains more sensitive to global growth expectations.
For investors, experts advise caution against impulsive reactions. Rick Kanda, Managing Director at The Gold Bullion Company, stressed that gold should be viewed as a long-term investment for financial storage, rather than a short-term trade. He advised that short-term market fluctuations should not deter those who have invested for long-term reasons. India’s current account deficit widened in the October-to-December quarter of fiscal year 2025-26, partly due to rising prices and shipments of gold pushing up imports, according to the Reserve Bank of India.
The sustained rally in gold and silver, even amidst a strengthening dollar, underscores the profound impact of geopolitical instability on investor behavior. The market’s repricing of risk, driven by the escalating Middle East conflict, highlights the enduring role of precious metals as a critical hedge against global uncertainty and potential inflationary pressures.