Gold prices continue rising as tension in the Middle East heightens. The precious metal posted a clear rise this week. Already, the Iran-Israel conflict has helped keep the buyers' position intact even after prices are getting overbought.
Gold prices increased minimally on Saturday as the price of 24 carat gold closed morning trade at Rs 7,785.3 per gram, up by Rs 120 on the previous day. The price of 22 carat gold has risen by Rs 110 to Rs 7,138.3 per gram.
According to Narinder Wadhwa, Managing Director at SKI Capital Services Ltd, in times of geopolitical instability, particularly from the Middle East, gold often turns into a safe haven, while crude oil prices react sharply to the worst fears over supply disruptions.
"The uncertainty fuels a flight to safety in gold and drives energy markets to speculate on potential oil shortages, making both commodities a barometer of global risk sentiment," said Wadhwa.
Analysts said continued rate easing interest would keep gold buyers interested.
Gold prices fell 0.2 percent to $2,649.69 an ounce on Friday as US job growth increased in September with the unemployment rate slipping to 4.1 percent. US markets closed higher on Friday after a stronger-than-expected jobs data.
If geopolitics turn further unfavorable by over the weekend, the gold prices could further accelerate, said analysts.
Market watchers have been advising investors in India to keep calm as the volatile situation in global markets is likely to improve soon.
Continued volatility in the global markets, including Indian markets, amid the escalating conflict in the Middle East had stock investors taking a cautious stance. In the near term, this pessimism is expected to continue as the heightened crude prices would invite sharper fund flows to cheaper markets, especially China.
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