Gold futures on the Multi Commodity Exchange (MCX) opened with a big jump on Friday, crossing the Rs 1 lakh mark per 10 grams for the first time in history, propelled by increasing geopolitical tensions in the Middle East that fueled safe-haven buying.
The valuable metal started the day on a sharp rise of Rs 1,108 or 1.12%, at Rs 99,500 per 10 grams, from Thursday's close of Rs 98,392. Momentum didn't fade for long, with gold rising to a high of Rs 1,00,403, breaking the psychological barrier of Rs 1 lakh. Prices were at Rs 99,673, up 1.30%, by 12:44 p.m.
This futures price surge also reflected in retail markets in India. As per India Bullion and Jewellers Association (IBJA), by about 12:50 p.m., 22-carat gold was selling at Rs 9,679 per gram, while 24-carat gold hit Rs 9,917 per gram.
Silver followed gold's lead in initial trade. It began at Rs 1,06,450 a kilogram, up Rs 565 or 0.53% from its last close of Rs 1,05,885. The metal rose to an intraday high of Rs 1,06,799 and was trading at Rs 1,06,328 per kg as of 12:45 p.m., up 0.42%.
This boost in Indian bullion prices is in line with trends in the global markets, where gold touched its highest in over a month. Spot gold rose by 1.3% to $3,428.28 an ounce, levels not seen since May 7. US gold futures rose by 1.4% to $3,449.60. During the week, the yellow metal has increased over 3.5%.
The gold price momentum upwards is largely being seen as a result of rising tensions between Israel and Iran. There were reports of Israeli airstrikes on Iranian nuclear and military installations, ramping up fears of an escalating conflict in the region.
Geopolitical uncertainty normally adds to the attractiveness of gold as a safe investment option during times of uncertainty.
Speaking on the development, Colin Shah, Managing Director of Kama Jewelry said, "The Indian gold prices reaching a record high is on expected lines considering the recent updates regarding geopolitical tensions and the Indian Rupee weakening."
He also pointed out that short-term price resistance is possible, but gold will more than likely range between Rs 1,00,200 and Rs 1,00,500 per 10 grams on the MCX, depending on the emerging global economic and political situation.
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