Heightened tensions between Russia-Ukraine led to acceleration in gold and crude oil prices on Tuesday.
The rising geo-political tensions sent Brent-indexed crude oil prices over $95 per barrel, the highest in several years. Similarly, gold prices traded higher with spot gold prices at COMEX rising to over $1,900 per ounce.
The rise in prices was triggered after Russian President Vladimir Putin ordered the deployment of troops into two separatist areas within Ukraine. On Monday, Russia recognised the two separatist regions' independence, a move that some fear puts Ukraine and Russia one step closer to a military conflict.
Russia is one of the world's top producers of crude oil and gold, and any western sanctions against it will stiffen the global supply.
Besides, the development also assumes significance for India as it is import-dependent to fulfil its crude oil and gold needs.
The rise in crude oil prices can escalate domestic prices, thereby triggering inflation.
"Gold and crude oil prices are trading on a positive note due to geopolitical tension," AIIFL Securities VP, Research, Anuj Gupta, said.
"We are expecting gold and crude oil prices may rise further... Gold prices may test $1,950 to $2,000 and crude oil prices may test $100 to $105 levels soon."
MOFSL Sr Vice President, Commodity & Currency Research, Navneet Damani, said: "Gold prices hit a near nine month-high, after tensions between Russia and US over Ukraine continue to rise.
"Broader trend on COMEX could be in the range of $1,885 - $1,925 and on domestic front prices could hover in the range of Rs 50,000-50,900."