Gold Prices Stabilize as Middle East Tensions Ease

Gold Prices Stabilize as Middle East Tensions Ease

Gold Prices Stabilize as Middle East Tensions Ease

Amid a welcome announcement of a ceasefire in South Gaza by the US, Egypt, and Israel, gold prices took a breather, with a morning opening at ₹59,209 per 10 grams. The precious metal further declined to an intraday low of ₹58,944. In the international market, gold prices continued to hover above $1,900 per ounce.

Factors Affecting Gold Prices

Experts in the commodity market have attributed the drop in gold prices to the easing tensions in the Middle East following the ceasefire announcement in South Gaza. The recent surge in gold prices had primarily been driven by the Israel-Hamas conflict. Analysts anticipate that gold on the MCX has immediate support levels at ₹58,750 to ₹58,700, while it faces resistance at ₹59,500. If the lower support levels are breached, gold prices may find further support at ₹58,250 to ₹58,300 on the MCX and $1,880 in the international market.

Geopolitical Uncertainty and Gold’s Safe-Haven Status

VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, emphasized that concerns regarding the Israel-Palestine conflict had led to a significant spike in Brent crude prices, pushing them above $90. Additionally, safe-haven buying had driven gold prices beyond $1,900. Vijayakumar highlighted that market anxiety was reflected in the CBOE VIX, which had surged above 19. He pointed out that from a geopolitical perspective, the situation was uncharted territory, and thus, investors should exercise caution.

Important Price Levels to Monitor

Anuj Gupta, Head of Commodity & Currency at HDFC Securities, noted that gold prices were facing pressure due to the relaxation of tensions in the Middle East following the ceasefire announcement. In the international market, the broader range for gold prices was between $1,900 and $1,980. On MCX, the broader range spanned from ₹58,700 to ₹59,500 per 10 grams. Gupta further explained that MCX gold prices had immediate support at ₹58,750 to ₹58,500, while resistance was encountered at ₹59,800 per 10 grams.

Maintaining a Cautious Approach

In light of the evolving geopolitical situation and the associated uncertainty, Anuj Gupta advised implementing a ‘strict stop-loss’ strategy when dealing with gold prices. The overall outlook for gold and silver had become cautious in the wake of the easing Israel-Palestine conflict.