Mumbai, Oct 20 (IANS) Gold prices rose to a three-month high on Friday and were headed for a second consecutive weekly gain, on the back of a safe-haven demand due to the Middle East conflict and expectations that the US Federal Reserve was likely to pause rate hikes.
Gold, seen as a safe store of value during times of political and financial uncertainty, has risen 2.2 per cent so far this week.
Gold prices crossed the Rs 60,000 per 10 gm on the Multi Commodity Exchange (MCX) on Friday and were hovering at Rs 60,313 in afternoon trade. In the international market, prices were around $1,976.40 per troy ounce.
Gold futures, maturing on December 5, 2023, stood at Rs 60,615 per 10 grams on the MCX, after recording a marginal hike of Rs 272.
As the Israel-Hamas war intensifies, there's a fear that it could escalate into a broader geopolitical crisis involving the US and Iran. With Israel preparing for a ground attack on Gaza and the US sending two aircraft carriers to the region, these fears have been exacerbated. Any escalation in the hostilities could disrupt oil supplies and trigger economic uncertainty worldwide.
According US media reports, Fed Chair Jerome Powell said he agreed "in principle" that the rise in yields was helping to further tighten financial conditions and this might lessen the need for additional rate increases.
Anuj Gupta, Head of Commodity & Currency at HDFC Securities, attributes the recent increase in gold prices to Chairman Jerome Powell's dovish stance on interest rate hikes. This has halted the US dollar's rally, triggering the rise in gold prices.
Fitch Solutions takes a neutral stance for gold prices in 2023, projecting an average of $1,950 per ounce.
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