West Asia conflict keeps gold, silver outlook bullish; buy-on-dips for gold, staggered investing for silver

Gold and silver are expected to remain supported in the coming months amid rising geopolitical tensions, particularly the ongoing conflict in West Asia, according to the March 2026 Precious Metals Outlook report by Tata Mutual Fund. The report maintains a bullish long-term view on both metals but recommends different investment strategies, suggesting investors buy gold on dips while adopting a staggered approach for silver due to higher volatility.

Precious metals prices, however, have been trading in a narrow range in recent sessions. In early trade on March 11, gold futures hovered around Rs 1,62,516 per 10 grams, while silver prices declined about 1.51 percent to Rs 2,73,646 per kilogram, reflecting cautious sentiment in global markets. According to the Augmont Bullion report, gold is expected to move towards $5,250–$5,300 per ounce (around Rs 1,63,500–Rs 1,65,000) in the near term, while silver, after recently touching the $90 level, could target $95 (around Rs 2,85,000) with support near $80 (around Rs 2,60,000). Analysts said bullion prices are currently being pulled in opposite directions by safe-haven demand due to the Middle East conflict and pressure from a stronger US dollar and rising Treasury yields.

The Tata Mutual Fund report noted that the conflict in West Asia has increased global uncertainty, pushing investors toward safe-haven assets such as gold. Escalating tensions involving Iran, Israel and the United States, along with the risk of a wider regional conflict, have raised concerns about supply disruptions, higher oil prices and renewed inflation pressures across major economies.

Disruption in trade

According to the report, disruptions in key trade routes and a rally in crude oil could create a higher inflation environment globally, which has historically been supportive for gold prices. Analysts said that the current geopolitical situation may remain prolonged, keeping financial markets volatile and strengthening the case for holding gold as a hedge against uncertainty.

Supporting gold

Another major factor supporting gold is continued buying by central banks. The report highlighted that several countries have been increasing gold reserves over the past decade as part of efforts to diversify away from the US dollar. This structural demand, combined with persistent fiscal deficits and currency uncertainty, is expected to keep gold attractive in long-term portfolios.

Investment demand has also remained firm despite recent price swings. Exchange-traded fund inflows indicate that investors continue to use gold as a defensive allocation, especially during periods of market stress. The report said that any correction caused by dollar strength or temporary easing of geopolitical tensions should be viewed as an opportunity to accumulate gold for the long term.

Outlook for bullion

While the outlook for gold remains stable, silver is expected to be more volatile because of its strong link to industrial demand. The report described silver as a developing growth story, with prices influenced not only by safe-haven demand but also by global economic activity.

More than 60 percent of silver consumption comes from industrial applications such as electronics, solar energy and manufacturing. As a result, demand from large economies, particularly China, plays a crucial role in determining price trends. Strong industrial usage in recent years has helped keep silver prices elevated.

The report also pointed to a persistent supply deficit as a key bullish factor for silver. The market has been facing shortages for several consecutive years, and inventories at major exchanges have declined to multi-year lows, indicating tight physical supply. This structural imbalance is expected to support prices over the medium to long term.

However, because silver tends to move more sharply than gold, the report recommends a staggered investment strategy instead of lump-sum buying. Gradual accumulation is considered more suitable for investors looking to manage volatility while building exposure.

Overall, the report said precious metals remain an important part of diversified portfolios. Gold is driven mainly by geopolitics, inflation risks and central bank demand, while silver offers additional upside linked to industrial growth and supply constraints.