Driven by rising geopolitical tensions in the Middle East, gold prices on Friday breached the Rs1 lakh mark per 10 grams on the Multi Commodity Exchange (MCX). Opening at Rs 99,500 per 10 grams, the yellow metal breached the psychological threshold of Rs 1,00,000 to reach Rs 1,00,403 with retail prices reflecting a similar trend.
Silver too saw gains in early trade.
Manav Modi from the Motilal Oswal Financial services Ltd said that on Friday gold marked an all-time high of Rs 1 lakh on the domestic front, hovering close to $3500 as investors sought safe-haven assets after Israel’s strike on Iran heightened Middle East tensions.
“This latest spike in hostilities in the Middle East has taken the focus off trade negotiations for now, and built the risk premium once again in the market.
The surge in bullion prices was attributed to heightened tensions between Israel and Iran, driving investors towards gold which is considered a safe-haven asset during times of geopolitical uncertainty.
International geopolitical developments also resulted in weakening of the Indian rupee against US dollar in early trade on Friday due to a spike in global oil prices and a firm dollar.
The rupee declined 56 paise to 86.08 against the US dollar in early trade today
According to Colin Shah from Kama Jewelry, gold prices may see some correction due to bouts of volatility but “we anticipate prices to hover in the range of Rs 1,00,200 and 1,00,500 on MCX, subject to international economic influences.”
“The gold prices in India hitting an all-time-high is on the much-expected lines given the latest development in international geopolitical tensions, and weakening of the INR. The uncertainties drive up the demand of gold as a safe investment haven as compared to other asset classes. The price trend is going to face some resistance which will keep it below 1 lakh in the short-term,” he added.
Earlier today the Israeli military launched airstrikes against Iran, targeting nuclear locations to block Tehran from developing atomic weapons, in an operation called ‘Rising Lion’.
Israel declared a state of emergency shortly after the strikes. The head of the Islamic Revolutionary Guard Corps Hossein Salami was killed in the strikes, according to reports. Meanwhile US military is reportedly preparing to send contingencies in the Middle East, including potential assistance with evacuating American civilians.
