Gold price dynamics due to geopolitical tension

Apr 23, 2024

Dassani BrosDean Belder, the leading bullion analyst said, gold remained range bound for the first two months of the year, staying above the US$2,000 level until it briefly broke through support in the middle of February, falling to its quarterly low of US$1,991.98 on February 13.

Following this low, gold began a slow climb toward the start of March, ultimately soaring to a quarterly high of US$2,251.37 on March 31. Gold has continued to move since then, briefly passing US$2,400 on April 12.

In the row, Colin Shah, MD, Kama Jewelry suggest to focus on, Gold price dynamics due to geopolitical tension! He said, “Primarily, the untamed and volatile price trend of the yellow metal breaching new highs, in the backdrop of the recent Iran-Israel conflict has led to investors withdrawing from riskier avenues and reinvesting in gold.

Given the scenario of looming escalations between the countries in conflict and the response by G7, the price dynamics of Gold will continue to be volatile and highly unpredictable, both internationally and domestically.

On the trade front, jewellery exports from India will get further sluggish owing to higher crude prices and tension, leading to a poor sentiment in the end-user class in international markets.

We wait and watch for the situation to normalize and hope for a truce with the best interest towards bringing economic stability.”

Another leading player, Sachin Kothari, Director at Augmont Gold for All said, “Gold prices are continuously sustaining around $2400 (~ Rs73000) amid ongoing risk-aversion following the confirmation that Israeli rockets had attacked an Iranian target, hence intensifying geopolitical tensions in the Middle East.

Safe-haven demand due to escalating Geopolitical tensions this week between Iran-Israel is holding up the prices. However, gold prices are in the overbought zone and price retracement/ profit booking will emerge in the coming days when the dust has settled down.”

 

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