Gold Prices Surge Amid Geopolitical Turmoil

Gold Prices Surge Amid Geopolitical Turmoil
Gold Prices Surge Amid Geopolitical Turmoil
Gold Prices Surge Amid Geopolitical Turmoil
Gold Prices Surge Amid Geopolitical Turmoil

Gold Prices Surge Amid Geopolitical Turmoil

Gold Prices Surge Amid Geopolitical Turmoil

Gold Prices Surge Amid Geopolitical Turmoil

Gold prices exhibited a robust surge during morning trading in the domestic futures market, largely driven by positive global factors. The international gold market experienced a notable rise in response to the uncertainty stemming from the Israel-Hamas conflict. Additionally, dovish comments from prominent US Federal Reserve officials exerted downward pressure on the US dollar and bond yields, further bolstering the appeal of the precious metal.

Safe-Haven Status Reinforced by Geopolitical Concerns

Geopolitical instability, exemplified by the Israel-Hamas conflict, has been a significant catalyst for gold’s recent gains. Reuters reported a substantial 1.6 percent surge in gold prices, marking its most significant one-day jump in five months, as tensions escalated in the Middle East. Gold has long been regarded as a safe-haven asset during times of geopolitical turbulence, economic unpredictability, and financial market volatility. With the Israel-Hamas situation expected to persist, gold prices are poised for further upward momentum.

Interest Rates and Gold’s Appeal

Apart from geopolitical events, gold prices are intricately linked to interest rates. In periods of low-interest rates, holding gold becomes more attractive as the opportunity cost diminishes. Conversely, when interest rates rise, other interest-bearing investments like bonds become more appealing, causing gold to lose its shine due to its lack of yield. Currently, MCX Gold is trading 0.25 percent higher at ₹57,716 per 10 grams around 10:15 am.

In response to the ongoing Israel-Hamas conflict, experts share their insights on the future of gold:

Praveen Singh, Associate VP at Sharekhan by BNP Paribas, highlights that gold has gained traction due to both geopolitical factors and dovish Federal Reserve comments. The evolving situation in the Middle East, coupled with upcoming US CPI inflation data, will likely support gold’s recovery.

Sugandha Sachdeva, Executive Director and Chief Strategist at Acme Investment Advisors, emphasizes gold’s role as a haven of stability during geopolitical turmoil. The uncertainty has reignited interest in the precious metal, potentially providing an attractive entry point for investors.

Prithviraj Kothari, MD and CEO of RiddiSiddhi Bullions Limited, and Manoj Kumar Jain of Prithvifinmart Commodity Research anticipate continued strength in gold and silver prices. The precious metals may see further gains, with key support and resistance levels identified.

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