Gold prices in India reach an all-time high on Friday, at ₹77,500 per 10 grams. The uncertainty building up in global geopolitics and the jitters building up over the US presidential election are seen as the two primary drivers of price surge in recent times.
Tensions in the Middle East have increasingly pushed gold as a haven, but it’s not the only reason, and a looser global monetary policy has also helped fuel the rally. In fact, gold prices broke the $2,700 mark per ounce for the first time in history, as spot gold advanced 0.5% to $2,706.76 per ounce by 0220 GMT.
Despite the US dollar’s strength, gold prices remain on an upward trend. While the strong US economic data is trying to boost the dollar and Treasury yields, a high possibility of a rate cut in November by the Federal Reserve still exists. Also, for the third time this year, the European Central Bank has trimmed interest rates, which is adding shine to gold prices at the end of a lackluster eurozone economy.
Gold prices in India reach an all-time high, will continue to gain momentum
Analysts believe that gold will continue to trade in the range between $2,500 and $2,800 an ounce over coming months, with geopolitical tensions and possible Federal Reserve rate cuts as supporting factors. Demand for the yellow metal keeps picking up again after another Hezbollah-Israel war has been sparked through the killing of Hamas leader Yahya Sinwar.
US political uncertainty is also fueling the gold rally: Vice President Kamala Harris and former President Donald Trump are running neck and neck in seeking voter support. Higher interest rates curb gold’s attractiveness since it is a non-yielding asset. Though in times of global turmoil, it remains a traditional safe haven investment.
Other precious metals also rallied, including silver, platinum, and palladium. China’s economic growth, though a bit more than the market’s expectation, has thus underpinned higher metal prices everywhere. Traders believe precious metals will remain volatile as political and economic uncertainty is further forged to create a preference for gold during very high financial instability and political risk.
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