CHENNAI: The conflict between Israel and Palestine lifted the gold prices on Monday, with spot gold (XAU) gaining 1% to settle at $1,847.47 an ounce as it is considered the safe haven asset.
The US gold futures also jumped 1% to $1,863.40 on Monday.
In the domestic market, spot prices for 24 carat gold jumped Rs 220 to Rs 58,200 per 10 gm, while MCX Gold December future surged Rs 494 on Monday to Rs 57,365 per 10 gm.
Gold market made a sharp rebound from a seven-month low last Friday at $1,832.26 per ounce.
Earlier it was facing pressure from higher interest rates and a stronger-than-expected job report in the US, which could lead to higher Fed policy rate cycles. Recent geo-political risks in the Middle-East, with the potential for further escalation into a war, has helped gold in the short term.
As per Kotak Securities, though headwinds persist from higher rates in the short term, US consumer inflation data will be in spotlight for the week, which might provide more insights on how long rates are going to stay higher.
“Geo-political concerns raise the risk premium for the safe haven yellow metal. Tensions in the Middle-East ramped up in the wake of Hamas attack on Israel, with alleged Iranian involvement raising concerns of a regional conflict. The impact might fade away and be minimal if it is limited to Israel and Palestine,” the report noted.
The oil prices have risen and demand for government bonds, US dollar.