Gold prices surge as geopolitical tensions rise: Buy or wait?
What's the story
Gold prices have witnessed a sharp rise lately, mainly due to the prevailing economic uncertainty and geopolitical tensions.
MCX gold rates jumped over 4% last week, while spot gold prices rose by 2.65%.
This jump is mainly due to the fall of over 1% in the Indian rupee (INR), which has further boosted the gold price rally in the domestic market.
Market update
MCX gold rates near record high
As of Friday, the MCX gold rates settled at ₹96,535 per 10g, gaining ₹3,835 per 10g this week against last week's close of ₹92,700.
This brings the current rate within striking distance of its record high of ₹99,358 per 10g.
Sugandha Sachdeva from SS WealthStreet explains that "the US Fed's decision to maintain interest rates at 4.5% at its recent policy meeting reflects ongoing economic uncertainties."
Geopolitical impact
Rising geopolitical tensions spur gold demand
The rising India-Pakistan tensions have further stoked the demand for gold, particularly in the domestic market. Any major depreciation in the INR due to these rising geopolitical risks could result in further gains.
Market forecast
Upcoming US-China trade talks could impact gold prices
The upcoming US-China trade talks over the weekend also bring uncertainty into the picture.
A positive outcome may calm market fears, possibly capping gold's gains. On the other hand, if talks collapse, that could spark a rally in gold prices.
Jateen Trivedi of LKP Securities predicts that "gold price will likely remain range-bound between ₹94,500 and ₹97,500," with increased volatility as risk sentiment continues to swing.