Geopolitical crisis: Gold and Silver shine on MCX amid growing Israel-Hamas tensions

Gold and silver rose on the Multi Commodity Exchange (MCX) on Monday as geopolitical tensions continue to escalate globally. Opening at Rs 59,209 per 10 grams, gold hit an intraday low of Rs 58,944. Internationally, gold traded around $1,921.40 per troy ounce. Meanwhile, silver started strong at Rs 71,200 per kg, dipping briefly to Rs 70,810 and is trading around $22.72 per troy ounce in the international marketplace. 

Anuj Gupta, Head of Commodity and Currency at HDFC Securities, says, “We noticed the biggest move in gold. It increased almost 2537 points in a week, 4.46 per cent higher and closed at 59408 levels. Silver increased by 3117 points, 4.57 per cent higher, and closed at 71287 levels. In the international market, it is trading at $22.70 per ounce. We are advising traders to buy on dips.” 

Despite the rallying US dollar, the appeal of gold remains unshaken, with the US Dollar Index marking a 0.60% gain to 106.67 on a weekly basis. 

Praveen Singh, Associate VP, Fundamental Currencies and Commodities, Sharekhan by BNP Paribas, says Israel’s warning to Gaza residents to evacuate the northern part of the strip within 24 hours as it looks to launch an all-out offensive against Hamas has heightened the geopolitical tensions that led investors pile up into safe-haven assets like bullions and US treasuries. “The metal closed with a huge gain of 3.32 per cent at $1932 Friday, which was its best single-day performance in almost seven months. The metal recorded a gain of $100 on the week as the ten-year US yields were down nearly 4 to 4.61 per cent. A furious short covering and massive short squeeze above the key psychological resistance at $1900 contributed to its parabolic rise,” said Singh. 

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Furthermore, escalating tensions amidst the Israel-Palestine conflict have spurred investors to invest in safe-haven assets such as gold, silver, and US treasuries. 

Amit Khare, Associate Vice President at GCL Broking, says, “As per the daily chart, bullions look good. We can see good upside movement in the coming future. So, traders are advised to make fresh buy positions in Gold and Silver near the given support level one with the stop loss of support level two and book near the given resistance levels: Gold December Support 59200/58900 and Resistance 59500/59700. Silver December Support 70700/69700 and Resistance 72000/72500.” 

With geopolitical tensions continuing to impact the global economy, the surge in gold and silver indicates the shifting investor sentiment towards safer assets. The ensuing period is thus anticipated to witness considerable volatility in the bullion market.