News

Published: April 13, 2024
Updated: April 13, 2024

Gold Prices Surge Amid Rising Geopolitical Tensions

Elevated Demand Despite Dollar and Treasury Yield Surge:

Gold prices are on the upswing, reaching new heights despite the simultaneous rise in the US dollar and Treasury yields. Last week marked the fourth consecutive week of increases, with MCX gold rates surpassing ₹1,000 per 10 gm, hitting a fresh high of ₹73,461 per 10 gm. Similarly, silver prices soared to ₹85,051 per kg on MCX during Friday's trading sessions.

Geopolitical Uncertainty Spurs Safe-Haven Demand:

The surge in gold and silver prices is primarily attributed to escalating tensions in the Middle East due to Iran-Israel war concerns. The White House's statement regarding the potential for an imminent attack by Iran on Israel has intensified geopolitical tensions, prompting investors to seek the safety of precious metals. Additionally, speculation surrounding US Fed rate cuts and substantial gold purchases by the Chinese central bank are contributing factors to the rally.

Expert Insights on Market Trends:

Analysts note that despite the strengthening US dollar index and rising Treasury yields, gold prices continue to rally, underscoring robust safe-haven demand. The persistent upward trend in gold prices suggests a bullish market sentiment, with expectations of further increases in the near future.

Market Outlook and Investment Strategies:

Investors are advised to adopt a "buy-on-dips" strategy, capitalizing on potential market corrections while geopolitical tensions persist. The resistance levels for MCX gold rates are projected to be around ₹73,500 per 10 gm, with the potential to reach ₹75,000 per 10 gm in the short term. Similarly, silver prices have breached the ₹85,000 mark on MCX, with a potential upward movement towards ₹91,000.

Despite headwinds from a strengthening US dollar and rising Treasury yields, gold prices are surging due to heightened geopolitical uncertainties, particularly surrounding the Iran-Israel conflict. Analysts foresee continued upward momentum in gold prices, with a bullish market outlook.