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Business News/ Markets / Commodities/  Gold prices surge to record high amid tensions in Middle East, silver rises 3%

Gold prices surge to record high amid tensions in Middle East, silver rises 3%

Spot gold climbed by 0.9% to reach $2,269.48 per ounce, following a record peak of $2,276.89. Meanwhile, U.S. gold futures surged by 1.5% to $2,290.40.

Gold prices today (Photo: iStock)Premium
Gold prices today (Photo: iStock)

Gold reached yet another record high as traders rushed to acquire the safe-haven asset amidst escalating tensions in the Middle East, on Tuesday. Despite a stronger dollar and reduced expectations for U.S. interest rate cuts, investors showed significant interest in gold.

At 10:40 a.m. EDT (1440 GMT), spot gold climbed by 0.9% to reach $2,269.48 per ounce, following a record peak of $2,276.89. Meanwhile, U.S. gold futures surged by 1.5% to $2,290.40.

“Gold prices have been hitting a new all-time high practically on a daily basis. Today, it has made a new high off 2266.86. from its February low of 1984 it has rallied by more than USD 280 over 6-7 weeks. While we remain bullish on gold for the long term, we believe the current rally is over-stretched and gold may correct over the next 4-5 weeks before resuming its long-term bull run," said Amit Goel, Co-Founder & Chief Global Strategist, Pace 360.

The dollar surged following Monday's release of data indicating that U.S. manufacturing experienced growth in March for the first time in 18 months.

As a result, traders reduced their expectations of a June interest rate cut to 58%, down from approximately 60% prior to the data release. Typically, such a scenario would exert downward pressure on zero-yield bullion.

“We do not see any impact of gold on other commodities as gold has been known to rally sometimes when the other commodities are bullish and sometimes when others are bearish. When dollar index is softening one can expect all commodities to go up but that is not the case this time around. Dollar index is at a multi-month high as of now. Gold is going up because of the fact that it was deeply oversold and under-owned. Rest of the commodity space is quite lacking lustre with only crude oil going up because of the middle East tensions," Goel added.

Back home, gold prices dropped by 50 to reach 68,370 per 10 grams in the domestic market on Tuesday, influenced by subdued patterns in the global markets, according to HDFC Securities. During the last trading session, the valuable metal concluded at 68,420 per 10 grams.

“Gold prices remained positive, experiencing a minor gap-up opening above 2250$ in Comex and above 68500 with a 150 gap-up in MCX. Dovish commentary from global banks spurred buying activity in gold, with expectations of interest rate cuts keeping prices firmly under bullish control. In the short term, the 68200-68000 range acts as a strong positive zone for Gold, while resistance is seen around 69000-69200," said Jateen Trivedi, VP Research Analyst, LKP Securities.

The price of silver increased by 3% to reach $25.86 per ounce, while platinum rose by 2.8% to $927.60, and palladium saw a climb of 1.1% to $1,007.52. Meanwhile, on MCX, silver witnessed a surge of 430, reaching 79,000 per kg. In the preceding session, it had settled at 78,570 per kg.

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Published: 02 Apr 2024, 08:56 PM IST
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