Bullion prices rise as economic and geopolitical uncertainties lead investors to seek safe-haven assets.
Chennai: Gold prices at the Multi Commodity Exchange have gained 21 per cent or Rs 15,080 per 10 gm since September, while silver prices have moved up 15.6 per cent or Rs 13,289 per kg.
Gold prices have moved up from Rs 71512 per 10 gm in the beginning of September to Rs 86,592 in February, gaining Rs 15,080 or 21 per cent in around six months. Silver has risen from Rs 84,910 per kg to Rs 91,199 during the period – up by 15.6 per cent.
In the international market, gold has gained 18 per cent and silver 16 per cent in the timeframe, as per the data of Kedia Commodities.
Bullion prices have been steadily moving up for the past few months as global political and economic uncertainties have been forcing investors to seek the safe haven asset. Last year, the Middle East tensions and Russia-Ukraine war have been fueling the uncertainties. Since the US elections, policy uncertainties, especially trade-related uncertainties amidst a flagging global trade, have seen gold and silver prices rising. The fears of inflation as a fall-out of trade war too lends support to gold.
The dollar index has remained volatile and the central banks have been increasing their gold reserves. US debt sustainability may encourage central banks, especially those with large US Treasury reserves, to increase their gold purchases.
The US trade tariff jitters and global growth are key concerns for the equity markets, dampening risk sentiment and boosting the yellow metal. The gold ETFs have steadily been growing their assets across key markets.
Most of the central banks have eased their monetary policy to boost growth. Despite a pause, the Federal Reserve is expected to deliver two rate cuts this year. Bank of Canada, the ECB, Swedish Riksbank, PBoC, and RBI also have eased their monetary policies, boosting market liquidity and gold’s appeal.
According to Goldman Sachs, if policy uncertainty, including tariff concerns, remains high, gold can surge to $3,300 per ounce by year-end, which will be another 11 per cent gain from the current levels.
