Gold prices breached the Rs 41,000 per 10-gram mark in the domestic market on Monday, tracking positive overseas trend from the international spot gold that neared a 7-year high, amid heightened tensions in the Middle East.
Supported by a weaker rupee, gold prices for 24 karat in Delhi, spiked to a record Rs 41,400.00 per 10 gram.
On the Multi Commodity Exchange, Gold 05 Feb 2020 Futures spurted by another Rs 984 or 2.5% to a record high of 41,096.00 per 10 gm. On a similar note, Silver March contract also surged 2.25% to Rs 48595 per kg.
Internationally, spot gold surged 1.5% to $1,579.55 per ounce and reached its highest since April 2013.
On January 3, gold prices climbed 2% following news on mounting tensions between the US and Iran after a top Iranian commander was killed in an airstrike by the US in Baghdad. The Pentagon confirmed the death of Iran's key military commander Qasem Soleimaniin, saying the strike was carried out at the direction of US President Donald Trump, and was aimed at deterring future attacks allegedly being planned by Iran.
According to traders, gold extended gains today after Iraq's parliament on Sunday recommended all foreign troops be ordered out of the country.
Adding to the tension, US President Donald Trump on Sunday vowed 'major retaliation' if Iran tries to avenge the killing of its key military commander and doubled down on a threat to bomb Iranian cultural sites. He also threatened to impose 'very big sanctions' on Iraq if it follows through on a Parliament vote calling for the expulsion of US troops based in the country.
Following the news, Brent crude futures jumped to four-month peaks today and gained $1.46 to trade at $70.06 a barrel, while U.S. crude climbed $1.17 to $64.22. Weighed by the spike in crude oil prices, coupled with rising concerns over US-Iran tensions, the domestic unit, Indian rupee too depreciated 25 paise to 72.05 against the US dollar on Monday.
The yellow metal is expected to trade with positive bias amid higher crude oil prices and geopolitical worries.