Gold Prices Soar on Middle East Tensions and Safe-haven Demand
Despite the ongoing rally in the US dollar rates and the US Treasury yield, gold prices have surged to new highs on Friday. The MCX gold rate crossed the ₹73,000 mark, reaching a fresh high of ₹73,461 per 10 gm. Similarly, silver prices also hit a new peak of ₹85,051 per kg on MCX during Friday’s trading session.
Market experts attribute this rise in gold and silver prices to the escalating tensions in the Middle East, specifically on the Iran-Israel war buzz. The demand for these precious metals as a safe-haven asset has increased significantly, overshadowing the impact of the US dollar rates and Treasury yields.
Anuj Gupta, Head of Commodity & Currency at HDFC Securities, emphasized the role of the Iran-Israel war news in driving up gold and silver prices. He also mentioned the US Fed rate cut speculations and the aggressive buying of gold by the Chinese central bank as contributing factors to the rally.
Despite the strong performance of gold amidst rising Treasury yields and a strengthening dollar, market analysts remain optimistic about its outlook. Jim Wyckoff, Senior Analyst at Kitco Metals, noted the resilience of gold in the face of these challenges, signaling strong safe-haven demand.
Looking ahead, investors are advised to adopt a buy-on-dips strategy, with potential price targets of ₹75,000 per 10 gm for gold and ₹91,000 for silver. The Comex spot gold price is expected to surpass $2,500 in the coming weeks, with Goldman Sachs revising its year-end forecast to $2,700 per ounce.
In conclusion, the current surge in gold and silver prices reflects market uncertainties and geopolitical tensions, underlining the appeal of these precious metals as safe-haven assets.
