Precious Metals Rally as Geopolitical Tensions Mount

Gold advanced Wednesday, gaining approximately $18, or 0.34%, to trade at $5,194 per ounce, while silver posted a more pronounced move, rising $1.63, or 1.87%, to $89.14. Analysts attribute the rally in precious metals primarily to trade policy uncertainty stemming from the ongoing constitutional standoff between the Trump administration and the Supreme Court.

Energy markets also firmed on the session. West Texas Intermediate crude futures (CL=F) climbed 0.4% to $65.86 per barrel following remarks by President Trump warning Iran against the pursuit of a nuclear weapons program. "My preference is to solve this problem through diplomacy," the President said, according to a Reuters report. "But one thing is certain: I will never allow the world's No. 1 sponsor of terror, which they are by far, to have a nuclear weapon." The comments come ahead of a scheduled resumption of US-Iran negotiations in Geneva on Thursday.

ING Head of Commodities Strategy Warren Patterson and Commodities Strategist Ewa Manthey cautioned that the situation remains precarious, noting that without a diplomatic agreement, the probability of military action is "high and growing." The analysts further noted that President Trump's stated 10-to-15-day deadline for Iran resolves to a date in very early March, adding that "this uncertainty means the market will continue to price in a large risk premium and remain sensitive to any fresh developments."

The geopolitical strain is producing parallel dislocations in Iranian domestic markets. On Wednesday, February 25, gold struck a record high in Iranian toman terms as currency and precious metals traders signaled the market had entered a highly sensitive phase — one in which a single headline carries the potential to materially reprice assets. The US dollar surged more than 2,000 tomans within a 24-hour period to reach 166,000 tomans, while the gold coin breached the 200 million toman threshold for the first time.

The record-setting moves in Iran's gold and coin markets were driven by three converging factors: the sharp depreciation of the domestic exchange rate, elevated global spot gold prices, and rising demand within the country. The currency's continued decline has intensified domestic inflation expectations, while globally elevated gold prices have provided traders with strong psychological support — pushing the price of one gram of 18-karat gold in Iran above 20.2 million tomans. Analysts identify growing geopolitical tension and speculation over further escalation as the primary force underpinning the surge.

Wishing you as always good trading,