Gold Prices Soar Amid Rising Geopolitical Tensions and Crude Oil Price Hike
The price of gold surged to ₹1,59,700 per 10 grams on Friday, while silver touched ₹2,44,988 per kg. This jump in precious metals can be attributed to rising geopolitical tensions, particularly with regards to potential U.S. sanctions on Iran. Investors are increasingly turning to gold and silver as a safe-haven asset during turbulent times.
Gold futures for the October contract on the Multi Commodity Exchange (MCX) rose by ₹1,205, while silver futures for the September contract gained ₹1,745. The increase in crude oil prices due to Iran's importance as an oil producer is also contributing to this trend. When crude prices rise, it tends to boost inflation fears globally.
However, it's essential to consider how these high prices impact the retail market in India, a significant consumer of gold. Historically, when prices move up sharply, physical demand from jewelry buyers and small investors slows down as they wait for prices to stabilize before making large purchases.