Gold prices are on a spectacular run, closing at ₹77,685 per 10 grams on Friday. With a 5% weekly gain, gold has marked its best performance since March 2023.
The driving forces behind this rally are escalating geopolitical tensions, economic uncertainty, and volatile stock markets. Let’s explore what’s fueling this uptrend and what lies ahead for gold investors.
Why Are Gold Prices Rising?
1. Russia-Ukraine War Impact
The ongoing conflict between Russia and Ukraine has intensified, sparking safe-haven demand.
- “Missile attacks and geopolitical risks have driven investors to flock to gold,” says Sugandha Sachdeva, Founder of SS WealthStreet.
- The war’s unpredictability has amplified gold’s appeal as a reliable asset.
2. Economic Uncertainty
Donald Trump’s presidential victory has added a layer of uncertainty to the global economy:
- “Markets are bracing for policy changes under Trump’s administration, making gold a safer bet,” notes Praveen Singh, VP at Sharekhan by BNP Paribas.
- The US dollar index has surged, but gold has remained resilient despite headwinds.
3. Stock Market Volatility
Rising inflation and interest rates have created instability in equity markets:
- According to Brandon Thor, CEO of Thor Metals Group, “Gold serves as a hedge against inflation and market corrections.”
- Investors are shifting from overvalued stocks to more secure investments like gold.
MUST READ: Reliance Shares Rally Amid Russia-Ukraine War: Key Insights for Investors
Technical Analysis of Gold
| Key Level | Price (₹ per 10 gm) | Significance |
|---|---|---|
| Resistance | ₹78,800 | Breakout may lead to new highs |
| Support | ₹73,500 | Strong buying zone |
What Lies Ahead for Gold?
Short-Term Triggers
- Geopolitical developments, especially regarding the Russia-Ukraine war, will remain the biggest drivers.
- Economic data, such as the US GDP report and inflation metrics, could influence gold prices.
Long-Term Outlook
Central banks’ continued accumulation of gold and persistent global risks make the metal a solid long-term investment.
Conclusion
Gold remains a beacon of stability in turbulent times. As global uncertainties persist, its price trajectory seems set to test new highs. However, investors should monitor resistance levels and geopolitical events closely to make informed decisions.
Disclaimer:
This article is for informational purposes only and does not constitute financial advice. Always consult a professional advisor before making investment decisions.