The Israel-Hamas conflict, coupled with dovish remarks from top US Fed officials, has contributed to this rise.
In such times of economic uncertainty and geopolitical turmoil, gold tends to shine as a safe-haven asset. However, it’s important to consider the impact of interest rates on gold’s appeal.
When interest rates are low, the opportunity cost of holding gold is reduced, making it more attractive. Conversely, when interest rates rise, other interest-bearing investments like bonds become more appealing.
As of 10:15 am, MCX Gold is trading at ₹57,716 per 10 grams, up by 0.25 percent. This indicates the current positive trend in gold prices.
Market participants are keeping a close eye on developments in the Middle East, especially the potential involvement of other regional countries like Iran in the conflict. It’s crucial to stay updated on these factors when considering your strategy for gold investments today.
In the wake of current geopolitical concerns, gold has found solid support. According to a Reuters report, on Monday, gold experienced a remarkable 1.6 percent surge – its most significant one-day leap in five months.
This surge was attributed to the military clashes between Israel and the Palestinian Islamist group Hamas, which heightened the demand for this safe-haven asset.
Traditionally, gold is viewed as a reliable safe-haven during times of geopolitical unrest, economic unpredictability, and financial market instability.
Given the ongoing Israel-Hamas conflict, there’s a likelihood of gold prices continuing their upward trajectory.
Additionally, it’s important to note that gold prices are influenced by interest rates. When interest rates are low, the cost of holding gold is reduced, making it a more appealing investment. Conversely, when interest rates rise, other interest-bearing options like bonds become more attractive.
Spot gold has seen an increase in demand due to its status as a safe-haven asset amidst the Israel-Hamas conflict. Alongside geopolitical factors, the dovish stance of the Federal Reserve has also bolstered the metal.
Market participants are vigilantly monitoring developments in the Middle East, particularly the potential involvement of other regional players like Iran in the conflict.
