Gold prices soared to a new high in the Indian domestic market on Friday, both in spot and futures, as investors sought safe haven amidst escalating geopolitical tensions, particularly due to Israel-Iran standoff.
In the domestic spot market, gold prices rallied by ₹1,603 per 10 grams or two per cent on Friday to Rs 99,058. In the global market, spot gold was up 1.7 per cent at $3,439.79 an ounce. It is near the record high of $3,500.05 witnessed in April. Prices gained over four per cent so far this week and 30 per cent year-to-date. US gold futures increased by 1.7 per cent to $3,461.
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In the global market, gold was last quoted at $3,416.07 an ounce, up 0.89 per cent for the day. This week, gold has gained over 3 per cent, while the precious metal’s rise since the beginning of this year is over 30 per cent.
On the Multi Commodity Exchange (MCX), the gold for August delivery breached ₹1 lakh per 10 gm mark to touch a fresh high of ₹1,00,403 per 10 grams. However, it ended the first session at ₹98,392 for August futures. The October contract hit soared to ₹101,319 and closed at ₹99,325, signalling a firm trend in gold prices in the coming months.
Renisha Chainani, Head of Research at Augmont, said gold surged beyond $3,400, as investors sought refuge from growing economic uncertainties and geopolitical concerns.
Much-awaited move
Colin Shah, MD, Kama Jewelry, said gold topping ₹1 lakh on MCX was on the much-awaited lines given the latest development in rising geopolitical tensions, and weakening of the Indian rupee.
“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 gold below ₹1 lakh in the short-term,” he said.
Prathamesh Mallya, DVP- Research, Non-Agri Commodities and Currencies, Angel One, said gold has gained investors’ confidence by delivering positive returns in 16 out of past 20 years and proved its reliability in uncertain situations underscoring its role as a safe haven asset.
Manav Modi, Senior Analyst, Commodity Research, Motilal Oswal Financial Services said geopolitical tensions escalated after Israel struck Iran as tensions mounted over US efforts to halt Iran’s production of atomic bomb materials.
The latest spike in hostilities in West Asia has taken the focus off trade negotiations for now and built the risk premium once again in the market, he said. This apart, number of Americans filing new applications for unemployment benefits held at an eight-month high last week, while dollar index and US yields also inched lower amid the economic data points.
NS Ramaswamy, Head -Commodity desk and CRM, Ventura said global central banks are on pace to accumulate over 1,000 tonnes of gold in 2025, marking a fourth consecutive year of heavy buying.
“Risk off sentiments dominates as West Asia conflicts between Israel and Iran escalated,” he said.
Kaynat Chainwala, AVP-Commodity Research, Kotak Securities said the US dollar fell to a three-year low amid subdued inflation data and signs of labour market softness, increasing expectations that the Federal Reserve may consider cutting interest rates.
On the trade front, the US and China have reportedly reached a tentative framework agreement, pending formal approval from both President Trump and President Xi, he said.
Chainani said gold prices have broken out of thier resistance at $3,425 and prices could now head towards the previous high of $3,500 in the near term.
Shah said prices may see some correction due to bouts of volatility. “We anticipate prices to hover in the range of ₹1,00,200 -1,00,500 on MCX, subject to international economic influences,” he said.