BAKU, Azerbaijan, March 12. The escalating
tensions in the Middle East have heightened anxiety across global
financial markets, prompting investors to gravitate toward assets
traditionally regarded as safe havens, Rovshan Amirjanov, Deputy
Chairman of the Board of Directors of the Azerbaijan Jewelers
Association Public Union and Chairman of the Technical Committee on
Precious Metals and Gemstones, told Trend.
"In this environment, precious metals, particularly gold and
silver, have once again moved to the forefront of investor
attention. However, attributing current market developments solely
to geopolitical dynamics would be an oversimplification. The
situation unfolding in global markets reflects the simultaneous
influence of several interconnected factors shaping price
movements," he added.
According to Amirjanov, one of the most notable developments in
global financial and commodity markets in recent days has been the
simultaneous rise in both gold and oil prices, albeit driven by
different underlying forces.
“Although both assets have recorded gains, the factors driving
these increases are not identical. Oil prices are primarily
influenced by supply risks and operational developments reflected
in the news flow. Gold, by contrast, is benefiting from growing
demand for safe-haven assets as geopolitical uncertainty
intensifies,” he explained.
The expert emphasized that the recent surge in gold prices
cannot be attributed solely to geopolitical tensions.
“This process is also significantly shaped by fluctuations in
the U.S. dollar, expectations surrounding interest rate policy, and
developments in energy markets. The decline in energy prices is
reinforcing expectations that inflationary pressures may gradually
ease. This, in turn, softens market expectations regarding the
continuation of tight monetary policy by central banks. In such an
environment, gold, being a non-yielding asset, often gains
additional support. As a result, investors increasingly view gold
as both a hedge against geopolitical risks and a safeguard amid the
possibility of relatively looser financial conditions,” Amirjanov
noted.
He further highlighted the strategic importance of the Strait of
Hormuz in this context.
“The Strait of Hormuz represents one of the key arteries of the
global energy supply system. Any serious disruption or heightened
risk along this route can intensify price pressures in energy
markets and trigger broader volatility across commodity markets.
Such developments may provide additional upward momentum for gold
prices. For this reason, investors view developments in the region
not merely as political events but as risk factors with direct
implications for market dynamics,” he said.
According to Amirjanov, the gold market is currently being
shaped by two principal forces.
“On the one hand, there is defensive demand fueled by
geopolitical risk. On the other hand, there are shifts in energy
prices, inflation expectations, and interest rate policies. At
times, these factors reinforce one another, pushing gold prices
higher; at other times, they generate short-term volatility in the
market.
Looking ahead, the most plausible near-term scenario appears to
be a period of broad price fluctuations in the gold market. Should
regional tensions intensify further, investor demand for safe-haven
assets may accelerate, potentially driving gold into a new phase of
growth. Conversely, an increase in diplomatic engagement and a
reduction in pressure on energy markets could trigger a short-term
correction in prices,” he said.
Amirjanov stressed that these global developments are also
directly relevant to Azerbaijan’s domestic market.
“The rise in global gold prices has a direct impact on jewelry
production costs and price formation in the domestic market. For
businesses dependent on raw material procurement, effective risk
management is becoming increasingly critical. The primary challenge
for the domestic market lies not only in rising prices but also in
the possibility of sharp and rapid price fluctuations,” he
stated.
Speaking about short-term forecasts, Amirjanov noted that the
most likely scenario for the gold market is the continuation of a
generally positive environment, albeit one accompanied by elevated
volatility.
“As long as geopolitical risks remain present, gold is likely to
retain its status as a protective asset. At the same time, any
signals indicating easing tensions or improving market sentiment
could trigger short-term price corrections,” he said.
According to the expert, the outlook for silver differs somewhat
from that of gold. While silver often follows the same overall
trajectory as gold, it is generally considered a more sensitive and
volatile market.
“On the one hand, growing interest in precious metals also
supports silver prices. On the other hand, silver’s significant
role as an industrial metal makes it more responsive to
developments in economic activity. As a result, silver may rise
more rapidly alongside gold during periods of strong demand, but it
can also retreat more sharply in response to negative economic
signals,” Amirjanov explained.
He emphasized that the key question currently facing the market
is not whether gold will continue to rise, but how upcoming
developments will influence its trajectory.
“The central issue for the market is not the continuation of
gold’s upward trend. Rather, the question is whether the next wave
of news will trigger another sharp price surge or lead the market
into a phase of short-term stabilization. Gold’s primary advantage
lies in its perception as a reliable store of value during periods
of uncertainty. Silver, by contrast, remains a more flexible,
sensitive, and volatile asset. Therefore, while demand for both
metals is expected to remain strong in the near term, the decisive
factor will be the pace and nature of the news flow influencing the
market,” Amirjanov concluded.
To note, an ounce of gold is currently traded on the London
Commodity Exchange in the range of $5,140–$5,160, while the price
of an ounce of silver stands at around $89.
The rise in international gold prices is also being reflected in
the domestic market. Retail prices for gold products across all
standard categories have increased compared to the previous
period.
Based on current market conditions, the retail price of
585-grade gold jewelry ranges from 200 ($117.6) to 240 manat
($141.1), while 750-grade gold products are sold at approximately
260 ($152.9) to 300 manat ($176.4). Products made of 999.9-grade
gold are currently priced between 300 ($176.4) and 340 manat
($200).
Stay up-to-date with more news on Trend News
Agency's WhatsApp channel
