Gold prices surged sharply on Friday, breaching the significant ₹1 lakh per 10 grams level in domestic markets. The sharp uptick is attributed to intensifying geopolitical tensions between Israel and Iran, along with a weakening U.S. dollar, which has bolstered demand for safe-haven assets.
On the Multi Commodity Exchange (MCX), gold August futures jumped ₹2,011 or 2.04% to ₹1,00,403 per 10 grams. This marks a record high, driven by panic buying and global uncertainty. Meanwhile, silver July futures also gained, opening at ₹1,06,695 per kg, a rise of ₹810 or 0.76%.
A day earlier, gold futures settled at ₹98,392 per 10 grams with a 1.75% gain, and silver closed at ₹1,05,885 per kg, up 0.47%.
What’s Driving Gold & Silver Higher?
Gold and silver prices are rallying due to a combination of heightened Middle East tensions, a declining dollar index, and sluggish U.S. economic indicators.
Israel confirmed airstrikes on Iran early Friday, with explosions reported in Tehran. The strikes targeted Iran’s nuclear and missile programs, further escalating regional instability.
International gold prices soared above $3,400 per troy ounce, reflecting intensified safe-haven demand.
The U.S. Dollar Index (DXY) fell to 98.23, down 0.31 points or 0.32%, making dollar-denominated commodities like gold more attractive.
Additionally, concerns over oil supply disruptions—especially in critical transit zones like the Strait of Hormuz—have fueled further market anxiety.
Macro Factors Supporting Precious Metals
U.S. Producer Price Index (PPI) data released Thursday pointed to easing inflation, opening the door for potential interest rate cuts by the Federal Reserve.
Initial jobless claims in the U.S. rose to 248,000, supporting the case for a more dovish monetary stance.
Renisha Chainani of Augmont predicts gold may continue its bullish trajectory, potentially heading toward ₹1,05,000 if global risk sentiment remains intact.
Manoj Kumar Jain of Prithvifinmart Commodity Research highlighted gold’s strong momentum and suggested that sustained trade above $3,400 could push prices even higher.
Long-Term Outlook
Manav Modi, Senior Analyst at Motilal Oswal Financial Services, noted that gold has gained over 30% in 2024, despite volatile conditions. He attributes the surge to persistent global uncertainty, trade tensions, and weak economic data. Modi identifies strong support for gold between ₹88,000–₹90,000 and advises accumulating on dips. His 12–15 month forecast sees gold rising to ₹1,06,000, assuming current macroeconomic trends hold.