Gold Silver Investment: Gold price is increasing rapidly amid war, know what will happen next?

Gold Silver Investment: The conflict between America, Israel and Iran started on 28 February 2026. The conflict includes attacks targeting Iran’s leadership and infrastructure. By March 13, nearly two weeks later, gold prices were trading in a range between a high of $5,277 per ounce and a low of $5,054 per ounce. As of March 13, gold prices on MCX fluctuated between Rs 169,880 (which was the high reached on February 27) to Rs 159,350 per 10 grams.

America and Israel are very concerned about Iran’s efforts to develop nuclear weapons. As a result, they have targeted sites related to Iran’s nuclear program. The attacks resulted in the death of Iran’s supreme leader, Ayatollah Ali Khamenei, who had led the country since 1989.

The conflict has now escalated, creating a “geopolitical risk premium” for commodities and disrupting oil and gas supplies passing through the Strait of Hormuz. This is an important waterway, through which 20 percent of the world’s oil shipments pass.

The scope of the war in West Asia has expanded to neighboring countries like Saudi Arabia, Lebanon, Iraq and UAE. Generally, the turmoil and uncertainty created by such events is expected to push gold prices higher. On the contrary, gold prices have shown a period of consolidation since the start of the war, and have traded within a certain range in international markets.

Due to the possible closure of the Strait of Hormuz, the risk premium implicit in oil prices has increased significantly. WTI crude has risen from a low of $60 per barrel to a high of $110 per barrel, raising fears of rising inflation around the world. In addition, investors around the world “dollar”—which is a safe investment option.

In contrast, a strong dollar and rising inflation environment are currently keeping gold prices from rising further despite geopolitical risks arising from the ongoing conflict. Since higher interest rates and a stronger dollar usually move in the opposite direction to gold prices, gold’s upward move has slowed down, and prices are currently stable in a narrow range.

What’s next for gold?

Gold is currently trading around $5,165 per ounce. Its price has increased by more than 80 percent in the last one year. In 2025 alone, it has reached its all-time high more than 50 times. The precious metal is caught in a tug-of-war between ongoing geopolitical tensions, demands from central banks, uncertainty over Federal Reserve policies and prospects for economic recovery. Given the current environment, three possible situations can emerge.

Bullish Scenario

Due to global recession and further increase in geopolitical tensions, gold prices may increase by about 15–20 percent from current levels in 2026.

Moderately Bullish Scenario

A slowdown in US economic growth, coupled with a modest cut in interest rates by the Fed, could push gold prices up by 5-15 percent.

Bearish Scenario

Due to America’s strong economic growth rate, rising inflation and high interest rates, gold prices may fall by 5-20 percent. (At present, the possibility of such a situation seems less.)