MCX gold prices in India surged to a record high of Rs 69,487 per 10 grams in opening trade, following the uptrend in the international market. As of 11:26 am, it was trading around Rs 68,828.
Published Date – 1 April 2024, 02:40 PM
Mumbai: Gold prices rose to a new lifetime high of $2,263.53 per ounce in the international market on Monday as geopolitical tensions increase in Central Asia, and the US Fed has signalled a rate cut.
Tracking the rally in the international market, the MCX gold price in India (Gold Futures contract for April 2024 expiry) soared to a record high of Rs 69,487 per 10 gm in opening trade and was hovering at Rs 68,828 at 11:26 am.
“The rise in gold prices has been triggered by the US Fed signalling a rate cut…Gold has continuously been the fond asset class for central banking and safe-haven investment avenue,” said Colin Shah, Founder and MD of Kama Jewelry.
Expectations of low interest rates make financial instruments less attractive for investors compared to gold leading to increased purchases of the yellow and the rise in prices.
Rising geopolitical risks and buying by central banks, led by China have also fuelled gold prices. With no end in sight to the Russia-Ukraine war and the Israel-Hamas conflict spreading to the Red Sea region, gold is seen as an attractive safe haven asset by investors amid geopolitical uncertainty.
The demand for gold in the domestic market is fuelled by the need for precious metal in marriages as it is gifted to brides and grooms in large quantities as jewellery. However, jewellers are of the view that the soaring gold prices may dampen this demand. This is also reflected in the declining imports of the precious metal, according to them.
“Gold prices have moved steadily higher over the last six months as expectations of a dovish Fed policy have been gaining ground. The fall in interest rates is positive for gold prices. The gold prices breaking key long-term resistance levels indicate there may be strong momentum which may continue over the near to medium term, some profit may not be ruled out though,” said Dr Joseph Thomas, Head of Research at Emkay Wealth Management.
