MUMBAI: The Israeli attacks on Iranian military and nuclear facilities early on Friday have not only left crude prices soaring and roiled other asset classes like equities and currencies, but also pushed up the safe-haven demand of gold.
Prices crossed the Rs 1-lakh-mark/10 gram yet again in the country, primarily due to the weakness in the rupee and not due to a massive spike in international prices which are hovering $100/ounce below the historic peak of $3500/ounce on April 22. On Friday, the yellow metal was trading 1.5% up on the CME at $3440 levels.
Gold's August contracts hit a fresh lifetime high of Rs 1,00,403/10 grams, while the contracts with October expiry hit an all-time high of Rs 1,01,295 on the MCX. In Kerala, the prices even crossed the April 22 high, fetching Rs 9295 for the 22 karat variant.
According to GEPC’s Abdul Nazar, this is primarily because of the exchange rate fluctuations. When gold crossed the sensitive $3500-mark, the rupee was trading at 85 to a dollar but today it is topping 86.5 in the open market, he told TNIE from Kochi.
Meanwhile, the rupee breached the 86-mark against the dollar, falling 55 paise against the greenback. Later on heavy RBI intervention, the unit closed at 86.09.
On the MCX, gold prices crossed the Rs 1 lakh per 10 grams mark for the first time ever, with August contracts trading at Rs 1,00,403/10 gram, and October contracts hitting an all-time high of Rs 1,01,295/10 gram.
This had the retail prices also surging and 10 grams of 24 carat gold jumped by Rs 2,120 to hit Rs 1,01,400.
"The broader uptrend in gold remains intact, with heightened sensitivity to geopolitical developments fueling fresh buying interest. Technically, key support remains at $3,290 on Comex and Rs 96,000 on MCX, while immediate resistance is seen at $3.400 and Rs 99,500 respectively," said Jateen Trivedi of LKP Securities.
Geopolitical tensions in the Middle East have added to the risk-off sentiment, supporting safe-haven demand for gold. The marginal slip in South Africa's gold output also aided the rally, said Tejas Shigrekar of Angel One said.
Shigrekar said the immediate target for the metal was at the 96,600-96,400 range on the lower end and 100,300-100,500 range at the higher end. Trading consistently above 100,500 would lead towards strong resistance at 101,200 and then finally towards further resistance at 117,000, he added.
Colin Shah of Kama Jewelry said the gold price crossing the Rs 1 lakh mark is on expected lines given the geopolitical tensions and weakening of the rupee.