Gold, Silver Rates Dip After Israel-Iran Ceasefire; Is It Time to Add More or Book Profits?

June 25, 2025 | New Delhi

After weeks of heightened geopolitical tensions between Israel and Iran that fueled a rally in global precious metals, gold and silver prices have cooled off following a ceasefire agreement announced earlier this week. As global risk appetite improves, bullion markets are seeing a corrective phase, prompting retail and institutional investors to reassess their positions.

Gold, Silver Prices Slide as Risk Premium Eases

Gold futures on MCX were trading down 0.65% at ₹71,420 per 10 grams on Tuesday, while silver futures dipped 0.88% to ₹89,220 per kg. In the international markets, spot gold hovered around $2,290 per ounce, retreating from the recent highs of over $2,360. Silver was last seen trading around $28.10 per ounce, after briefly touching $29.50 last week.

The easing of tensions between Israel and Iran has shifted market sentiment away from safe-haven assets like gold, towards riskier equities and bonds.

"The geopolitical risk premium that was baked into gold prices over the past month is unwinding. With the ceasefire holding, we are seeing some profit-booking and rotation of funds into equity markets," said Navneet Damani, Senior VP – Commodity Research at Motilal Oswal Financial Services.

Central Banks and Inflation Data Still Key Drivers

While geopolitical risks have abated for now, market watchers caution that fundamentals still favor precious metals in the medium to long term. Central banks continue to accumulate gold as a strategic reserve, and inflation remains above target levels in many economies despite ongoing rate hikes.

In the U.S., the Federal Reserve recently held interest rates steady, signaling a cautious approach amid cooling inflation but uncertain growth. Core PCE data due later this week will be closely watched.

"Gold is still supported by macroeconomic uncertainty, sticky inflation, and robust central bank demand. These dips could be opportunities to accumulate gradually, especially if one has a 6-12 month horizon," said Sugandha Sachdeva, Founder of SS WealthStreet.

Retail Investors: Add or Exit?

For Indian retail investors, the recent dip has sparked a dilemma—should they add more at current levels or book profits?

Over the past year, gold has delivered close to 17% returns, while silver has outperformed with gains of nearly 25%, thanks to a combination of geopolitical tensions, a weaker dollar, and industrial demand.

However, analysts recommend a cautious approach.

"Investors should avoid chasing short-term price movements. Accumulating gold in a staggered manner via SIPs in sovereign gold bonds (SGBs) or gold ETFs is more prudent than making lump-sum investments," said Anuj Gupta, Head of Commodity & Currency at HDFC Securities.

He added that silver, given its volatility and dual role as an industrial and precious metal, may see sharper swings and should be considered only by those with a high-risk appetite.

Is the Bull Run Over? Not Quite

Although the immediate trigger—Middle East tensions—has subsided, analysts believe the broader bull run for precious metals is far from over.

A weaker dollar, looming rate cuts by central banks in 2025, and geopolitical fragility in other regions like Ukraine and Taiwan may continue to lend support to gold and silver. Additionally, expectations of slower global growth could increase the appeal of gold as a defensive asset.

"We could see gold consolidating in the $2,250–$2,320 range in the short term. A breakout above $2,350 may push prices towards $2,400 or higher later this year," said Ravindra Rao, Head of Commodity Research at Kotak Securities.

Silver, too, may benefit from increasing demand in green energy and electronics sectors, especially if industrial output in China rebounds in the second half of 2025.

Investor Outlook: Tread Carefully, Think Long-Term

The recent price dip may feel like a signal to book profits, but for long-term investors, it could also be an opportune entry point. Experts suggest maintaining a balanced portfolio with 10-15% allocation to gold and silver, especially in times of macroeconomic uncertainty.

Gold continues to serve as a hedge against inflation, currency debasement, and geopolitical instability. Meanwhile, silver offers diversification with the added kicker of industrial growth tailwinds.

However, volatility is expected to persist in the near term. Investors are advised to monitor global cues including U.S. inflation data, Fed commentary, and any flare-ups in global conflict zones.

The Israel-Iran ceasefire has brought short-term relief to global markets and triggered a cooling-off in gold and silver prices. But the structural factors driving demand for precious metals—macroeconomic uncertainty, inflation concerns, and central bank buying—remain intact.

For investors, this dip presents both an opportunity and a cautionary tale: rather than timing the market, a disciplined, diversified, and long-term approach remains the best strategy.