The Indian Domestic Market Sees a Rally
The Indian domestic market witnessed a significant rally in gold prices on Friday, with spot gold prices surging by ₹1,603 per 10 grams or two per cent to reach an all-time high of Rs 99,058. This rise was mirrored in the global market, where spot gold prices increased by 1.7 per cent to $3,439.79 an ounce. The prices have gained over four per cent so far this week and 30 per cent year-to-date.
- Key statistics:
- Spot gold prices surged by ₹1,603 per 10 grams or two per cent to Rs 99,058.
- Global spot gold prices increased by 1.7 per cent to $3,439.79 an ounce.
- Prices have gained over four per cent so far this week and 30 per cent year-to-date.
Global Market Analysis
The global market has also witnessed a significant rise in gold prices, with the precious metal trading at $3,416.07 an ounce, up 0.89 per cent for the day. This week, gold has gained over three per cent, while the precious metal’s rise since the beginning of this year is over 30 per cent.
| Market | Price (USD per ounce) | Price (INR per gram) |
|---|---|---|
| Global Spot Market | $3,416.07 | Rs 98,392 |
| US Gold Futures | $3,461 | Rs 99,325 |
| Multi Commodity Exchange (MCX) – August Delivery | Rs 1,00,403 | Rs 98,392 |
Expert Insights
Renisha Chainani, Head of Research at Augmont, attributed the surge in gold prices to investors seeking refuge from growing economic uncertainties and geopolitical concerns. Colin Shah, MD, Kama Jewelry, echoed this sentiment, stating that gold topping ₹1 lakh on MCX was on the much-awaited lines given the latest development in rising geopolitical tensions and weakening of the Indian rupee.
“Uncertainties drive up the demand of gold as a safe investment haven as compared to other asset classes. The price trend is going to face some resistance, which will keep gold below ₹1 lakh in the short-term,” said Colin Shah, MD, Kama Jewelry.
Geopolitical Tensions and Gold Prices
The escalating tensions between Israel and Iran have taken the focus off trade negotiations and built the risk premium once again in the market. Manav Modi, Senior Analyst, Commodity Research, Motilal Oswal Financial Services, attributed this to the geopolitical tensions escalating after Israel struck Iran. The latest spike in hostilities has increased the risk premium in the market, and the number of Americans filing new applications for unemployment benefits held at an eight-month high last week.
- Key points:
- Escalating tensions between Israel and Iran have taken the focus off trade negotiations.
- The risk premium in the market has increased due to geopolitical tensions.
- The number of Americans filing new applications for unemployment benefits held at an eight-month high last week.
Global Central Banks’ Gold Accumulation
NS Ramaswamy, Head -Commodity desk and CRM, Ventura, stated that global central banks are on pace to accumulate over 1,000 tonnes of gold in 2025, marking a fourth consecutive year of heavy buying. Kaynat Chainwala, AVP-Commodity Research, Kotak Securities, added that the US dollar fell to a three-year low amid subdued inflation data and signs of labour market softness, increasing expectations that the Federal Reserve may consider cutting interest rates.
“Risk off sentiments dominate as West Asia conflicts between Israel and Iran escalated,” said NS Ramaswamy, Head -Commodity desk and CRM, Ventura.
Trade Front
On the trade front, the US and China have reportedly reached a tentative framework agreement, pending formal approval from both President Trump and President Xi. Kaynat Chainwala, AVP-Commodity Research, Kotak Securities, stated that this development has increased expectations that the Federal Reserve may consider cutting interest rates.
Price Outlook
Renisha Chainani, Head of Research at Augmont, predicted that gold prices have broken out of their resistance at $3,425 and could now head towards the previous high of $3,500 in the near term. Colin Shah, MD, Kama Jewelry, anticipated prices to hover in the range of ₹1,00,200-1,00,500 on MCX, subject to international economic influences.
“We anticipate prices to hover in the range of ₹1,00,200-1,00,500 on MCX, subject to international economic influences,” said Colin Shah, MD, Kama Jewelry.
Conclusion
The Indian domestic market witnessed a significant rally in gold prices on Friday, with spot gold prices surging by ₹1,603 per 10 grams or two per cent to reach an all-time high of Rs 99,058. The global market has also witnessed a significant rise in gold prices, with the precious metal trading at $3,416.07 an ounce, up 0.89 per cent for the day. The escalating tensions between Israel and Iran have taken the focus off trade negotiations and built the risk premium once again in the market. As investors continue to seek refuge from growing economic uncertainties and geopolitical concerns, gold prices are likely to remain a safe haven asset.
