Geopolitical Instability Boosts Demand for Safe-Haven Asset
Gold prices soared to an unprecedented high on Tuesday, reaching Rs 91,400 per 10 grams in early futures trading, driven by increasing global uncertainties, particularly in the Middle East.
The June delivery contracts for gold on the Multi Commodity Exchange (MCX) marked a historic peak of Rs 91,400 per 10 grams. However, prices slightly retreated later in the session, stabilizing at Rs 91,174 per 10 grams, registering an increase of Rs 457 or 0.5%. The contracts also reported an open interest of 19,166 lots.
Global Gold Markets Reflect Similar Trend
The surge was echoed in international markets, where gold futures climbed 0.38%, touching a new lifetime high of USD 3,135.44 per ounce on the New York exchange.
Analysts Attribute Spike to Middle East and Ukraine Tensions
Market analysts linked this significant rise in gold prices to intensifying geopolitical tensions, notably in the Middle East. Rahul Kalantri, Vice President of Commodities at Mehta Equities Ltd, highlighted the factors behind the rally:
The persistent global uncertainties have driven investors to flock towards gold as a reliable safe-haven asset, providing a hedge against escalating risks.
