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.
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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.
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International gold prices soared above $3,400 per troy ounce, reflecting intensified safe-haven demand.
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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
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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.
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Initial jobless claims in the U.S. rose to 248,000, supporting the case for a more dovish monetary stance.
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Renisha Chainani of Augmont predicts gold may continue its bullish trajectory, potentially heading toward ₹1,05,000 if global risk sentiment remains intact.
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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.