Gold prices surged by ₹831 to reach ₹74,222 per 10 grams over the weekend, a significant jump driven by global tensions and economic shifts. The concerns of renewed tension between Iran and Israel, particularly following a helicopter crash involving Iran’s President, have had a profound influence on the market. Furthermore, a recent drop in US inflation has sparked expectations of a potential cut in US interest rates, further fueling the bullish trend in gold prices.
Market Opening and Recent Trends
After a trading holiday, gold opened at ₹74,222 per 10 grams, up from ₹73,383 last Friday, according to data from the Indian Bullion and Jewellers Association of India. Despite volatility, gold has shown a bullish trend this month, rising by ₹2,887 per 10 grams from the ₹72,164 recorded on May 2.
Global Influence and Central Bank Policies
On a global scale, gold prices reached a peak of $2,450 an ounce before retreating to $2,410 on Tuesday. This drop was a direct result of central bank policymakers indicating their reluctance to commit to lowering interest rates. Jateen Trivedi, VP Research Analyst at LKP Securities, highlighted that the hopes of a US interest rate cut, triggered by lower inflation, have significantly boosted gold prices. Speculation is rife that the Federal Reserve might initiate rate cuts as early as September, a factor that could further impact gold prices.
Market Volatility and Price Predictions
While tensions eased over the Iran-Iraq conflict due to unclear causes of the helicopter crash, gold prices have remained volatile. Trivedi predicts prices will fluctuate between ₹71,000 and ₹75,000 in the near term.
Demand Trends and Future Outlook
Aamir Makda, Commodity and Currency Analyst at Choice Broking, highlighted the continued bullish momentum in gold, supported by central banks purchasing gold as a safe-haven asset. Despite record-high prices, India’s gold imports are expected to drop by 90% in March, reaching the lowest level since the COVID-19 pandemic.
Amit Goel, Chief Global Strategist at Pace360, highlighted that gold has surged by nearly 30% since last October. He suggests that prices may fall over the next six months, advising investors to postpone their investments. However, he also anticipates a rise in demand for paper gold in India, positioning gold as a critical asset class over the next five years.
Silver Prices on the Rise
Silver prices also saw significant gains, increasing by ₹6,500 to ₹92,873 per kg, up from ₹86,373 last Friday. This surge is attributed to industrial solid demand, with silver rallying ₹13,154 per kg this month.
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