Gold Rate: Despite the ongoing surge in US dollar rates and US Treasury yields, gold prices concluded the week on a higher note for the fourth consecutive time. On Friday, the MCX gold rate surpassed ₹1,000 per 10 gm, reaching a fresh pinnacle of ₹73,461 per 10 gm. Correspondingly, silver prices also attained a new peak of ₹85,051 per kg on the MCX during Friday’s trading sessions.
Analysts in the commodity market attribute the remarkable ascent in gold and silver prices to the escalating demand for these precious metals as safe-haven assets. They point to heightened geopolitical tensions in the Middle East, particularly surrounding the Iran-Israel conflict, as a primary catalyst for this surge in demand.
Additionally, speculations regarding potential rate cuts by the US Federal Reserve, coupled with significant gold purchases by the Chinese central bank, contribute significantly to the ongoing rally in gold and silver prices.
Iran-Israel war news
Anuj Gupta, Head of Commodity & Currency at HDFC Securities, pointed to the escalating tensions between Iran and Israel as a key factor driving the surge in gold and silver prices on Friday. He highlighted statements from the White House indicating the possibility of Iran launching an attack on Israel in the near future, which has heightened tensions in the Middle East region.
Despite the concurrent rise in US dollar rates and US Treasury yields, Gupta emphasized that the geopolitical uncertainty surrounding the Iran-Israel conflict has spurred demand for safe-haven assets like gold and silver.
Additionally, he noted that speculation regarding a potential rate cut by the US Federal Reserve following strong US inflation figures last week, along with aggressive gold purchases by the Chinese central bank, further contribute to the ongoing rally in precious metal prices.
Gold price outlook
Jim Wyckoff, Senior Analyst at Kitco Metals, highlighted the robust demand for safe-haven assets, particularly gold, despite the simultaneous climb in the US dollar index and Treasury yields. He noted that this resilience in gold prices amid such market conditions underscores the strong appeal of gold as a safe-haven investment during times of uncertainty and volatility.
Regarding the potential impact of surging gold prices on other assets, Chris Gaffney, President of World Markets at EverBank, acknowledged that gold has defied expectations by rallying even in the face of data that would typically be considered negative for the precious metal. Gaffney suggested that while a correction in the bull market for gold may be healthy, the overall trend is likely to remain positive, reflecting ongoing investor interest and confidence in gold as a valuable asset amidst economic uncertainty.
Anuj Gupta of HDFC Securities advises investors to adopt a buy-on-dips strategy until there is a resolution to the Iran-Israel crisis. He notes that the MCX gold rate faces resistance at the ₹73,500 per 10 gm level, but a breakthrough could propel prices to ₹75,000 per 10 gm in the near future. Similarly, silver prices have surpassed the ₹85,000 mark on the MCX, and sustaining above this level could lead to a rise to ₹91,000.
Gupta suggests that the Comex spot gold price has the potential to exceed $2,500 in the coming weeks, with support expected to hold steady at the $2,280 level.
In contrast, Goldman Sachs has raised its year-end gold price forecast to $2,700 per ounce from $2,300, attributing the metal’s bullish performance to its resilience against typical macroeconomic factors.