US-Iran Tensions Threaten Indian Stock Market and Precious Metals

US President Donald Trump has stated that the United States is considering a possible military attack on Iran as soon as Sunday, warning that Washington might need to finish the job or reach a deal with Tehran. This development points to three distinct scenarios for the Indian stock market, gold, and silver prices when trading resumes.

Market Scenarios And Expert Views

Stock market experts outline three potential paths based on the US-Iran situation. In the first scenario of a US-Iran deal, bulls are expected to outperform bears in both equities and commodities. In the second scenario of a Sunday attack on Iran, equities, gold, and silver will face a major setback following heavy selling last week. Avinash Gorakshkar of Avinash Mentor Research notes a third possibility of a status quo until the US Midterm election results are announced on November 3, 2026, due to an unencouraging response from Iran.

Impact On Indices And Commodities

Sumeet Bagadia of Choice Broking states that the Nifty 50 index may break below its support of 22,200 and test 21,800 to 21,750 if the war escalates, but could break above the 22,700 to 22,750 resistance band if a deal occurs. The BSE Sensex, which finished at 73,123, could drop to the 72,500 to 72,300 range during an escalation or push past 73,800 on a deal. Sandeep Pandey of Basav Capital explains that escalation would push crude oil prices higher from the current $115 per barrel level, impacting inflation and interest rates. Anuj Gupta notes that silver trades around 1,96,000 rupees per kg and could drop to 1,85,000 or 1,78,000 rupees if tensions grow, while gold at 1,42,000 rupees per 10 grams could touch 1,40,000 or 1,37,000 rupees. A deal could push gold to 1,45,000 and 1,48,000 rupees, and silver to 2,03,000 and 2,10,000 rupees per kg.

Context

Geopolitical tensions in the Middle East frequently disrupt global crude oil supplies, which directly influences inflation rates and monetary policy decisions in oil-importing countries like India. Financial markets typically react swiftly to such external shocks by shifting capital between risk-heavy equities and safe-haven assets like gold and silver.