Gold price today: Escalating Israel-Iran war talk boosts rate for 6th week running

Apr 20, 2024 | Articles

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Gold price today: Escalating Israel-Iran war talk boosts rate for 6th week running

As per insights from experts in the commodity market, the current trajectory of gold prices is experiencing an upward movement owing to heightened geopolitical tensions in the Middle East, particularly following purported accounts of Israel’s drone airstrike in Iran. These experts note that apprehensions surrounding the Israel-Iran conflict have spurred demand for this safe-haven asset. They emphasize that the present gold price finds critical support within the range of ₹72,300 to ₹72,270, while the broader spectrum for MCX gold stands between ₹72,300 to ₹73,300 per 10 grams.

Additionally, they underscore that the current gold price is set to oscillate within a narrow band of $2,380 to $2,420. It was also indicated the wider range may extend from $2,350 to $2,450 per ounce.

Why is gold price rising now?

* Gold prices are on the rise for the sixth consecutive week due to escalating geo-political tensions, fueled by fears of the Iran-Israel conflict turning into an even wider one in the Middle East.

* Despite the strengthening of the US dollar, both gold and silver prices are experiencing an upward trajectory driven by safe-haven demand.

* The surge in gold and silver rates today coincides with a northward movement in the US dollar index.

* The US dollar price has reached a five-month peak, with the US dollar index maintaining levels above 106.

Notably, there are a number of reasons why gold prices rise in general and among them, the biggest is political instability, conflicts, in certain parts of the world. Not just that gold is even seen by many as a hedge against inflation and the vagaries of economic slowdowns. There are instances of even central bank policy changes being made in interest rates or monetary policies that devalue currencies and this automatically makes gold attractive. And of course, there is the demand and supply push and pull factor. This means anything from production bottlenecks, jewelry demand, and investor sentiment, can influence gold prices.

Analyst speaks on gold price movement

“Gold prices have continued their relentless upside move for the sixth consecutive week in a row, hovering close to record highs. Despite a strong US dollar and indications from the US Federal Reserve that a restrictive monetary policy is likely to continue, gold prices surged by more than 1 percent,” LiveMint quoted Sugandha Sachdeva, Founder of SS WealthStreet said as saying.

What to look out for

“Focus might now shift to the US Fed meeting and US economic data,” says a Kotak Securities report even as Sachdeva adds that if gold stays between ₹72,300 to ₹72,270 per 10 grams, things will continue looking good for its future. But if it drops below this range, people might start selling to take some profit, because prices have gone up a lot in the past three months. Sachdeva said prices look ‘slightly overstretched’.