“The US–Israel strikes on Iran represent a significant geopolitical shock, raising the global oil risk premium and boosting demand for safe haven assets like gold and silver. For India, with close to 90% dependence on imported crude, any sustained rise in Brent prices quickly feeds into higher fuel costs, broader inflation, and a wider current account deficit. This complicates the RBI’s disinflation path and could delay rate cuts.
Indian equities have already turned risk off, with expectations of more volatility, foreign investor outflows, and pressure on autos, financials, and energy intensive sectors. Precious metals are likely to stay supported as long as escalation risks remain. The conflict premium will ease only when there is clarity on leadership in Tehran, credible channels for de escalation, and assurance that vital oil routes such as the Strait of Hormuz remain open,” says Rajeev Sharan, Head – Criteria, Model Development & Research, Brickwork Ratings.