Delhi’s precious metals market saw a dramatic rally Thursday as silver shot up Rs 18,000 per kilogram to Rs 2.64 lakh, a 7.32% gain. Gold followed with a Rs 1,950 increase to Rs 1.58 lakh for 10 grams of 99.9% purity, up 1.24%.

Traders pointed to global uncertainty sparked by US-Iran hostilities and crumbling negotiations in the Russia-Ukraine war. Investors rushed into gold and silver as reliable stores of value amid fears of broader conflict.

Global spot silver rose 1.03% to $77.97 per ounce. Gold prices pushed toward $5,000 per ounce, according to international market data. Delhi rates tracked these overseas moves closely, amplified by local demand.

“Geopolitical risks are front and center,” said one market analyst in Delhi. “US threats of military action against Iran, combined with no progress in Ukraine peace talks, have everyone seeking protection in metals.”

The spike marks one of the sharpest single-day jumps in recent months for silver. Gold’s advance, though smaller in percentage terms, added significant value given its higher baseline price. Both metals opened higher in Delhi’s bullion hubs like Zaveri Bazaar and continued climbing through the session.

Broader economic signals played a role too. A weakening US dollar and expectations of interest rate cuts bolstered the appeal of non-yielding assets like precious metals. Yet experts stressed geopolitics as the dominant force.

In Mumbai and other Indian markets, similar patterns emerged, though Delhi recorded the most extreme silver gains. Nationwide, jewellers reported brisk sales despite the price jump, with buyers locking in positions before further rises.

US-Iran friction intensified this week after reports of potential American strikes on Iranian facilities. Meanwhile, Russian and Ukrainian delegates ended talks in Geneva without breakthroughs, dashing hopes for a ceasefire.

Market participants watched closely for US President statements and any Iranian retaliation signals. A single tweet or official announcement could send prices even higher, traders warned.

India, the world’s second-largest gold consumer, feels these swings acutely. Imports have already surged this year, straining reserves. The latest rally adds pressure on the Reserve Bank of India to manage inflows.

For consumers, the news means steeper costs for jewellery and investment bars ahead of festivals like Diwali. Silver, popular in utensils and coins, faces the biggest squeeze.

Analysts expect volatility to persist. Any de-escalation in tensions could trigger pullbacks, but for now, the flight to safety shows no signs of slowing.