MUMBAI: Gold has reversed the losing streak it saw after the conclusive win that Donald Trump made in the recent US presidential polls, after the flare-up in the 1,000-day-old war that Russia has been waging on Ukraine.
The immediate trigger for the rally in gold price is the fear in the Western capitals that Kiev firing long-range US-made ballistic missiles deep into a Russian military base on November 19 may force Moscow to use nuclear weapons on Ukraine.
The Ukrainian attack came on the same day President Vladimir Putin lowered Russia’s threshold for the use of nuclear weapons in case Nato-supplied more tactical weapons were used against the Kremlin or its close ally Belarus, which could be eligible for a nuclear strike back from Russia.
In the run-up to the US polls, gold had scaled to record high of over 2,750/ounce dollar but as soon it became clear that Trump was on his way to a second office in White House, price crashed and lost over 6% since then. But the Russian-Ukraine war flare up has already reversed half of that.
Back home, this wedding season is one of the biggest with 18 most auspicious days and as many as 4.8 million marriages are set for this season, up from 3.5 million last year, which are going to see spendings to the tune of Rs 6 lakh crore, up from 4.25 lakh crore last year. Of the total spending, 15% are likely to be on jewellery alone.
“Gold prices have seen a shift towards safe-haven demand following a significant weekly decline and a six-day losing streak amid rising geopolitical tensions. This was further supported by declining US treasury bond yields, which prompted profit-taking in the dollar, benefiting gold,” S Abdul Nazar, a national director at All India Gem and Jewellery Domestic Council, told TNIE.