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Gold rate today: Iran-Israel war news fuels gold price rally despite rise in US dollar rate, treasury yield

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Gold rate today: Despite the continuous rally in the US dollar rates and the US Treasury yield, gold prices finished higher for the fourth week in a row. The MCX gold rate registered over 1,000 per 10 gm on Friday and touched a fresh high of 73,461 per 10 gm mark. Similarly, silver prices touched a new peak of 85,051 per kg on MCX during Friday deals. According to commodity market experts, gold and silver prices are skyrocketing despite the rise in the US dollar rates and the US Treasury yields, which is because of the rise in demand for gold and silver as a safer haven. They said that the immediate reason for the rise in the safer haven demand is escalating tension in the Middle East on Iran-Israel war buzz whereas US Fed rate cut speculations and aggressive gold buying by the Chinese central bank are also playing an important role in the current gold and silver prices rally.

Iran-Israel war news

Speaking on the reason for gold and silver prices rally on Friday, Anuj Gupta, Head of Commodity & Currency at HDFC Securities said, “The primary reason for skyrocketing gold and silver prices can be attributed to the Iran-Israel war news. The White House has issued a statement that Iran may attack Israel sooner than later, which has escalated the Middle East tension. That’s why gold prices and other precious metal prices are skyrocketing despite the rise in the US dollar rates and the US Treasury yields.” He said that the US Fed rate cut buzz after the strong US inflation figures last week and aggressive buying of physical gold by the Chinese central bank is also supporting the yellow and white metal price rally.

Pointing towards the level of safer haven demand, Jim Wyckoff, Senior Analyst at Kitco Metals said, “What’s telling about the strength of gold is the U.S. dollar index and Treasury yields are climbing, yet gold continues to rally strongly – that’s very indicative of strong safe-haven demand.”

On how this skyrocketing gold prices and other precious metal prices will impact other assets, Chris Gaffney, President of World Markets at EverBank said, “Gold has pushed back against some data that should have typically been negative. It will be somewhat healthy to see a correction in the bull’s market, but the trend will continue to be positive.”

Gold price outlook

Advising investors to maintain the buy-on-dips strategy till there is ease in the Iran-Israel crisis, Anuj Gupta of HDFC Securities said, “MCX gold rate is facing hurdle at 73,500 per 10 gm level. On breaching this level on a closing basis, we can expect the gold prices to touch 75,000 per 10 gm level in the near term. Likewise, the silver price has breahced the 85,000 hurdle on MCX. If it manages to sustain above the 85,000 level on Monday, then we can expect the precious white metal to touch the 91,000 level.”

The HDFC Securities expert went on to add that the Comex spot gold price has the scope of surpassing the $2500 mark in the coming weeks, while it is expected to hold above support currently placed at $2280 level.

Meanwhile, Goldman Sachs hiked its year-end gold price forecast to $2,700 per ounce from $2,300, citing the metal’s bull market’s indifference to the usual macro factors.

(With inputs from Reuters)

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

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