In India, the price of 24 carat gold has already crossed Rs 78,000 per 10 grams, while the MCX cross gold futures are at Rs 77,000 per 10 grams.
Key factors behind the rally
Gold’s latest rise has been driven by several key factors:
Geopolitical uncertainty: The ongoing conflict between Israel and Hamas, with Hezbollah threatening further escalation, has fueled demand for safe havens.
Investors tend to flock gold during periods of conflict and uncertainty, viewing it as a reliable store of value.
US economic concerns: Despite signs of economic strength in the US, traders still expect the Federal Reserve to cut rates soon. This expectation, along with the possibility of further economic turmoil, increases gold’s appeal.
Lower interest rates make gold, a non-yielding asset, more attractive.
Election nerves: The upcoming US elections, with tough competition between Kamala Harris and Donald Trump, have also contributed to market volatility, pushing further gold prices
higher.
Loose monetary policies: Central banks around the world, including the European Central Bank, have been cutting interest rates to combat slow economic growth.
These rate cuts support gold prices by making traditional investments less attractive.
Rahul Kalantri, VP Commodities at Mehta Equities, explained: “Gold prices are benefiting from ECB rate cuts and safe haven demand amid heightened geopolitical tensions. We expect gold to continue trading between $2,500 and $2,800 per ounce.”
What’s next for gold investors?
Analysts expect gold to remain elevated as geopolitical risks and economic uncertainty persist.
“Gold is showing no signs of slowing down,” said Tai Wong, an independent metals trader, adding that the precious metal has recovered despite the strengthening of the US dollar.
For Indian investors, with gold close to 78,000 rupees per 10 grams, experts recommend caution.
Support levels are expected between ₹76,900 and ₹76,640 per 10 grams, with resistance between ₹77,280 and ₹77,500 per 10 grams.
Given the unpredictable geopolitical and economic outlook, gold remains the preferred hedge, but investors should keep an eye out for potential corrections.
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