Gold prices remained volatile this week in India, tracking a similar movement in global markets. On MCX, February gold futures ended 0.12% higher on Friday at 39,878 per gram, after hitting a record high of 41,293 earlier this week. Silver rates on MCX on Friday settled 0.67% higher at 46,890 per kg, capping a volatile week.

Geojit Financial Services in a note said that as long as the gold holds 39,870, prices would remain supported.

During the week, geopolitical tensions between US and Iran reignited safe-haven demand for gold with global prices hitting the highest in six years earlier in the week. But the rally stalled as the risk of war between Iran and the US faded.

Investors were reminded on Friday that Iran-US tensions are far from over after US President Donald Trump announced sanctions against the Islamic republic. HSBC has raised its 2020 forecast on gold prices to $1,613 an ounce from $1,560.

According to a Bloomberg report, hedge funds and other large speculators boosted their their bullish bets on bullion to the highest since September. In the week ended January 7, money managers’ bullish bets rose 4.7% to 299,814 futures and options, according to data released on Friday by US Commodity Futures Trading Commission.

Elsewhere, despite soft US payrolls number, which was released on Friday, US Federal Reserve is unlikely to change its current neutral stance on rates, analysts said.

Softer interest rates and geopolitical tensions boost the price of gold. Gold traders are now focused on a 'Phase 1' trade deal signing between Washington and Beijing, likely next week, SMC Global said in a note.

In India, gold prices had surged 25% in 2019, amid a global rally triggered by US-China trade tensions. (With Agency Inputs)

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