The expert assessed the prospects of gold amid tensions in the Middle East

Gold and silver prices are rising this week amid heightened geopolitical tensions and fears of a widening conflict in the Middle East. Alexander Schneiderman, Head of Alfa-Forex's Customer Support and Sales Department, told Izvestia on March 2 about the impact of the situation in the Persian Gulf on the precious metals market.

"The aggravation of the situation in the Persian Gulf traditionally increases the demand for defensive assets. The market is pricing in the risk of an expansion of the conflict and the possible involvement of the United States and Israel in a protracted military campaign against Iran," he said.

According to the expert, in conditions of increasing uncertainty, investors are reducing the share of risky instruments and increasing their positions in precious metals. Gold is reacting faster and more strongly as tensions in the region, through which much of the world's energy flows pass, increase concerns about inflation, disruptions in oil supplies and rising currency volatility. This creates additional demand for metal as a capital preservation tool.

"This week, the base trading range for gold is estimated near local highs. While maintaining the tension, the quotes are able to test the upper limits of the year. Under the given scenario, prices may repeat annual highs in the region of $ 5,600 and above," added Schneiderman.

According to him, silver is moving after gold, but remains more volatile due to the high share of industrial demand. In the short term, the metal may grow synchronously with gold and strive to update local highs. The expected range for the week is $80-105. If tension persists, silver's growth potential will remain, but the dynamics may be less stable than gold's, the expert concluded.

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On the same day, it became known that the exchange price of gold rose to $5,397.85 per troy ounce, adding about 3% amid the worsening situation in the Middle East.

On February 28, the United States and Israel launched a large-scale military operation in Iran. Trump called her goal "protecting the American people." In response, Iran launched Operation True Promise 4 and attacked American military bases in the Middle East, as well as Israeli cities. The UAE, Bahrain, Iraq, Oman and other Persian Gulf countries were affected by the Iranian attacks.

Later, on March 1, it became known that the supreme leader of the Islamic Republic, Ayatollah Ali Khamenei, was killed in Israeli attacks, national mourning was declared in the country and an interim governing council was established. Iranian President Masoud Peseshkian has vowed to avenge Khamenei's death. Russian President Vladimir Putin expressed his condolences over the death of the Iranian leader and condemned the assassination.

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