On Tuesday, gold prices commenced with notable strength, reaching their peak levels in a week, driven by escalating geopolitical tensions. On the Multi Commodity Exchange, gold February futures were observed trading at Rs 1,38,578 per 10 grams, reflecting an increase of Rs 458 or 0.33%. Amid a prevailing defensive investor sentiment, bullion persists in securing support as a safeguard against market volatility.
During a session characterized by significant volatility on Monday, prices for gold and silver experienced a notable increase in both domestic and international markets, driven by rising geopolitical tensions. The catalyst emerged following reports that the US apprehended Venezuela’s President Nicolas Maduro on Sunday due to drug trafficking allegations, instigating a surge of uncertainty throughout global markets. Gold February futures concluded at Rs 1,38,120 per 10 grams, reflecting a 1.74% increase, whereas silver March futures surged 4.16% to finish at Rs 2,46,155 per kilogram on the MCX. The bullish momentum was primarily fueled by safe-haven demand, as investors sought refuge in precious metals in response to escalating concerns regarding global instability.
The US President’s stern warnings to Colombia, Cuba, and Mexico concerning illicit drug shipments have intensified market unease. In the wake of Maduro’s capture, Swiss authorities have reportedly enacted a freeze on his assets, a decision that analysts suggest may intensify safe-haven flows into gold and silver. Manoj Kumar Jain remarked on the developments, stating, “This act could further boost safe-haven buying for precious metals.” He also highlighted the influence of currency fluctuations, stating, “Weakness in the rupee is supporting gold and silver prices domestically.”
The US Dollar Index remained around the 98.25 level, experiencing a slight decline of 0.02%. In light of the increased volatility, Jain expresses a positive outlook regarding the resilience of support levels. “We are experiencing very high price volatility in both precious metals, but silver could hold support at $65 per troy ounce and gold around $4,240 per troy ounce on a closing basis,” he stated.