As geopolitical tensions between Iran and Israel intensify, gold has emerged as a sought-after safe haven for investors. Various factors, including the escalating conflict, the anticipation of US Federal Reserve interest rate cuts, and the upcoming festive and wedding seasons have increased the yellow metal's value.
In response to the heightened geopolitical risks and lower US bond yields, gold prices reached approximately Rs 76,114 per 10 grams on the MCX on Thursday evening. As global uncertainties persist, market analysts anticipate that the yellow metal's upward trajectory will continue.
Hareesh V, Head of Commodities, Geojit Financial Services, says, "Gold prices hovering near lifetime highs on worries over escalating Middle East tensions which raised the safe haven demand for the commodity. A possible increase in jewellery demand amid peak festival season and a weak Indian rupee also aided the commodity in the domestic market. Meanwhile, a sharp recovery in the US dollar limited major gains. Anyhow, investors are now focusing on US Non-farm payrolls data scheduled on Friday to get an outlook on the US economy and the further policy path of the US central bank."
Further, India's recent reduction in import duties on gold has fuelled demand, attracting buyers eager to capitalise on the favourable pricing. Meanwhile, in China, where confidence in traditional investments like real estate and stocks has waned, gold has witnessed a surge in popularity. The country's central bank has also been steadily increasing its gold reserves.
Pranav Mer, Vice President, EBG - Commodity & Currency Research, JM Financial Services Ltd, said, "Gold remains supported by ongoing developments in the global market with sluggish economic activity, ongoing middle-east conflict and recent signs of escalation, buying among ETF investors, portfolio diversification among traders/ investors with equities near all-time highs, central bank adding bullion to its reserves, stimulus measure from China, and the beginning of the rate cut cycle by global central banks. On chart... the trend remains positive with support at 74800/ 73980, while on the prices are likely to move higher toward 78500/ 80000 in short-term."