Gold and silver prices saw a dramatic rise on Wednesday as geopolitical tensions in the Middle East escalated and as the possibility of the current conflict between the United States and Iran increased. Precious metals were becoming popular with investors as safe-haven assets, pushing the prices up in the domestic and international markets.
The gold price of 24-carat gold shot up to a very high level and stood at a rate of ₹14,429.7 per gram, which is an impressive weekly growth by approximately 3.7 per cent. In a larger perspective, gold prices have surged almost 16 per cent in the last month signifying high levels of bullish activity. Likewise, 22-carat gold stood at ₹13,217.605 per gram and also saw a significant increase.
Silver prices have been no exception, and it started soaring to ₹2,36,338 per kilogram, with the demand rising and the market becoming volatile. Analysts attribute this rally to a mixture of geopolitical risks, inflation issues and movements of the US dollar and bond yields.
The second-largest importer of gold in the world after China, India depends on imports and domestic recycling to supply its demand. With the increase in world uncertainty, bullion is usually in demand, as it is generally viewed as a protection against inflation and financial volatility.
According to market experts, the process of continuous events in the market including diplomatic processes like the proposed peace initiatives will be still affecting investor sentiments. Unless the tensions are settled, precious metals could be left high as any indication of de-escalation could cause the price to rectify in the next few weeks.