Gold crosses Rs 1 lakh mark; Israel's strike on Iran triggers buying frenzy
Investors have turned to gold as a safe haven amid the escalating geopolitical tensions, pushing its prices to record highs
Gold on Friday (June 13) crossed Rs 1 lakh per 19 gram on the Multi Commodity Exchange (MCX) for the first time, thanks to the buying frenzy triggered by Israel's strike on Iran.
As Israel launched attacks on Iran’s nuclear and military facilities, investors turned to gold as a safe haven. The escalating geopolitical tensions pushed the prices to record highs.
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Historic high on MCX
Gold had been trading in a narrow range over the past few days. Some market watchers even predicted a possible decline.
However, in the early hours of June 13, Israel launched an offensive targeting not only Iran’s nuclear facilities but also its military bases. The attack triggered a global stock market downturn and, conversely, ignited a sharp rally in gold prices.
On the MCX, gold futures for August delivery surged to Rs 1,00,403 per 10 gram, setting a new record. October delivery contracts jumped to Rs 1,01,295 per 10 gram. The spot bullion market also witnessed a steep rise, with 24-carat gold prices climbing by Rs 2,120 in a single day to touch Rs 1,01,400 per 10 gram.
In addition, silver prices jumped by Rs 1,100 to revisit the all-time high of Rs 1,08,100 per kg (inclusive of all taxes) on Friday.
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Global fears
Commenting on the renewed surge in gold prices, Head of the Commodity Desk and CRM at Ventura, N S Ramaswamy, told The Federal: "The escalating tensions between Israel and Iran have created an atmosphere of fear globally. Investors are shifting away from risky assets to safer options like gold."
He also noted that the long-standing friction between the US and Iran continues to simmer. Although there was a brief glimmer of hope with a potential US-China trade deal, fresh remarks by US President Donald Trump about raising tariffs have rekindled market uncertainty, further driving demand for gold.
Meanwhile, a drop in US inflation has led investors to anticipate a possible interest rate cut by the US Federal Reserve (Fed), weakening the US dollar.
Central banks step up gold purchases
Ramaswamy further highlighted that central banks worldwide are planning to purchase around 1,000 tonnes of gold this year, marking the fourth consecutive year of large-scale buying. The next decision from the US Fed is scheduled for June 18, 2025, which could provide further direction to gold prices.
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Trusted investment
“Amidst the ongoing global uncertainty, gold continues to be a safe and reliable investment. Investors are including it in their portfolios to shield themselves from market volatility,” Ramaswamy added.
In the international market (COMEX), gold is currently priced at $3,430 and may soon climb to $3,540. The resistance level stands at $3,476, with support at $3,400 and $3,345.
In the domestic market (MCX), August delivery gold is trading at Rs 99,800 after having hit the record high of Rs 1,00,403. The next support level is at Rs 98,900, and the price may soon reach Rs 1,02,000.
(This article was originally published in The Federal Desh)
