Gold and Silver Prices Surge Amid Rising Uncertainty Due to Israel-Palestine Conflict

Gold and Silver Prices Surge Amid Rising Uncertainty Due to Israel-Palestine Conflict

VoM News Desk | October 9, 2023 | 12:28 PM IST | Breaking News | Follow on Google News

Gold and Silver Prices Surge Amid Rising Uncertainty Due to Israel-Palestine Conflict

Gold and Silver Prices Surge Amid Rising Uncertainty Due to Israel-Palestine Conflict: Gold and Silver Rally on Geopolitical Tensions

Amid escalating uncertainty caused by the Israel-Palestine conflict, gold and silver prices have witnessed robust buying interest. The Multi Commodity Exchange (MCX) reported strong performances for both precious metals. The gold price for the December 2023 expiry contract opened at ₹57,000 per 10 grams and quickly soared to an intraday high of ₹57,400 as the commodity market commenced trading. In the spot market, gold is currently hovering around $1,850 per ounce.

Similarly, silver prices on MCX also opened higher, starting at ₹68,740 per kilogram, and rapidly climbed to an intraday high of ₹68,980 per kilogram shortly after the market’s opening. In the international market, silver is trading around $21.80 per ounce during Monday’s trading sessions.

Geopolitical Tensions Drive Precious Metals

The recent surge in gold and silver prices can be attributed to the heightened geopolitical tensions in the Middle East, specifically the Israel-Palestine conflict. Anuj Gupta, Head of Commodity & Currency at HDFC Securities, noted that the uncertainty stemming from the outbreak of war in Israel has led investors to turn to gold and silver as safe-haven assets. With concerns about other assets such as equities, mutual funds, and bonds facing potential sell-offs, investors are looking to shift their funds into precious metals. As a result, the Israel news is serving as a major catalyst for the prices of gold and silver in the near term.

Other Influences on Precious Metal Prices

Apart from the Israel-Palestine conflict, several other factors are influencing gold and silver prices. Praveen Singh, Associate VP of Fundamental Currencies and Commodities at Sharekhan by BNP Paribas, highlighted key events that investors will be closely monitoring. These include U.S. Producer Price Index (PPI) data for September, Federal Open Market Committee (FOMC) minutes, Consumer Price Index (CPI) data for September, and University of Michigan consumer sentiment and inflation expectations.

From the European perspective, Germany’s CPI, industrial production, Euro-zone’s Sentix investor confidence, and the UK’s monthly GDP figures will be of interest. Additionally, China’s trade balance and CPI data will further captivate traders.

Impact of a Weakening U.S. Dollar

Anuj Gupta also emphasized the weakening trend of the U.S. dollar, which has faced significant selling pressure. The dollar index has fallen below 106 levels, and there are expectations that it may reach 103 levels if it breaches its immediate support at 105 levels. The decline in the U.S. dollar can be attributed to a robust U.S. jobs report for September, which heightened expectations of another interest rate hike by the U.S. Federal Reserve at its November meeting. While the U.S. economy added a surprising 336,000 new jobs in September, a dip in hourly earnings suggested a slight moderation in wage pressures, leading to a softening of the dollar index.

Important Levels for Investors

Regarding crucial levels for investors, Anuj Gupta provided insights. In the international market, gold currently has immediate support at $1,835 per ounce, with resistance at $1,880 per ounce. On MCX, gold faces resistance at ₹57,800 and ₹58,300 per 10 grams.

For silver, immediate support is positioned at ₹66,000, while near-term targets are anticipated at ₹71,000 and ₹74,000 per kilogram. Gupta advised investors in gold and silver to maintain a “buy on dips” strategy as long as the Israel-Palestine conflict persists.

VoM News Desk

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