Gold prices rose to their highest level amid escalating geopolitical tension between US and Iran following a missile attack by Iran on military bases housing US troops in Iraq. Amid escalating Iran-US crisis, major global equity indices saw a sharp sell-off as investors turned cautious and sought refuge in the safe-haven metal
In global markets, gold traded near a 7-year high, with spot gold climbing above $ 1,600 an ounce and rising 2% to $1,610 per ounce.
Tracking gains in international spot prices, coupled with depreciation of the rupee against the US dollar and soaring oil prices, retail gold prices in India crossed Rs 42,000 per 10 gm today.
Gold February futures contract in India rose Rs 630 or 1.5% to the intraday high of 41,293 per 10 gm today on the MCX.
In a similar trend, silver futures on MCX jumped 1.4% or nearly Rs 700 to Rs 48,785 per kg.
Gold and oil prices rose today on news that Iran launched over a dozen ballistic missiles targeting at least two Iraqi airbases that hosted US military forces. This was a retaliation move by Iran on the assassination of their top commander General Soleimani that was ordered by the US.
Crude oil futures skyrocketed 5.1% during the session, with Brent crude contracts for March delivery climbing to $US71.75 per barrel and US brent crude soaring 4.42% to $65.47 a barrel.
The yellow metal is expected to trade with positive bias amid rising crude oil prices and geopolitical uncertainty.
The rupee, the local currency also reversed trend amid the rising geopolitical volatility and tumbled 20 paise to cross above the 72-mark per dollar at the interbank foreign exchange market.
Commenting to gold's trend today, Jateen Trivedi, Senior Research Analyst (Commodity & Currency) from LKP Securities said, "Gold witnessed strong gap up opening on news of Iranian missile attacks on US base military bases in Iran/Iraq to take revenge on US somehow shall keep the buyers of Gold very much interested."
On gold's technical outlook, he said, "41,000 seems a crucial level on closing basis hence a close above it can give further confidence to bulls and a close below 41,000 can keep markets in range of 41,000-40,000".
By Rupa Burman Roy