Gold price climbs to $2000 peak on Israel-Hamas war. Opportune to buy despite strong US dollar, rising treasury yields?
- Gold price is soaring despite strong US dollar and rising US treasury yields because market is more concerned about the global uncertainties caused by Israel-Hamas war, say experts
Gold rate today: On account of Israel-Hamas war fueling global uncertainties, spot gold price hit $2,000 levels on Friday and closed at 2,006 per ounce levels. Gold future contract on Multi Commodity Exchange (MCX) for December 2023 expiry surged ₹308 per gm and ended at ₹61,260 levels on Friday.
Gold and silver prices are rising despite strong US dollar and rising treasury yields. On Friday, 10-year US bond yield ended at 4.845 levels whereas US dollar index ended at 106.58 levels.
Likewise, silver price on MCX gained ₹222 per kg on Friday and ended at ₹71,802 per kg levels. In international market, silver rates ended at $23.09 per ounce levels.
Israel-Hamas war in focus
On why gold price today is skyrocketing, Colin Shah, MD at Kama Jewelry said, "Globally, gold prices are on the rise due to the uncertainty in the international market created by the Israel-Hamas conflict and its impact on global economic conditions, followed by the strengthening of the US Dollar. This price rise will further drive investors towards gold, owing to its credibility as one of the safest asset classes. With the Fed likely to maintain its stance in the upcoming meeting with the scope for one rate hike during the year, it is expected to keep the gold price within the range of $ 2,000 levels."
Expecting gold price rally in domestic market on festival demand, Colin Shah of Kama Jewelry said, "With the festive season and wedding season, we see the price dynamics to be of little to no hindrance for the Indian gold buyers owing to the rise in per-capita income and the sentimental value attached towards buying gold during the festive season and weddings, a tradition well-kept in the Indian culture."
On why gold prices are rising despite strong US dollar and rising US treasury yields, Anuj Gupta, Head — Commodity & Currency at HDFC Securities said, "Market is more concerned about the rising Middle East tension as it believes that US treasury yields and US dollar will cool down in near term as chances of US Fed rate hike are low. So, US dollar and US treasury yields are no more working a taper for gold price rally.
Important levels to watch
On major levels about gold price in domestic and international market, Anuj Gupta of HDFC Securities said, "In international market, gold rate today has support placed at $1,980 per ounce levels whereas crucial support is now placed at $1,945 per ounce levels. On the upper side, gold price today is facing hurdle at $2,010 per ounce levels. On breching this hurdle, spot gold price may go up to $2,025 per ounce levels."
"On MCX, gold price today hs support placed at ₹60,800 to ₹60,750 per 10 gm levels whereas it has crucial support placed at ₹60,200 levels. On upper side, gold price may go up to ₹62,200 levels once it breaches its current resistance placed at ₹61,500 per 10 gm levels."
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decision.
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