BENGALURU: Gold prices have been skyrocketing ever since the conflict between Israel and Hamas began in West Asia. This is happening ahead of the festive season in India — Dasara in October and Deepavali in November — when more people buy gold as these months are considered auspicious.
The gold price, which is Rs 58,680 for 10gm (24 carat), is likely to touch Rs 70,000 soon. Likewise, the price of 22 carat gold, which has now crossed Rs 53,000 for 10gm, might go up to Rs 60,000 in the coming days. “Any war will have an impact on gold prices. We are expecting this to last for a few weeks. This apart, the interest rate hike in the US also pushed the prices of yellow metal up,” according to TA Saravana, president of Karnataka Gold Jewelers’ Association.
CA Surendra Mehta, national secretary of India Bullion and Jewellers’ Association, attributed the increasing prices of gold to the conflict in West Asia. In fact, gold prices, which saw a downward trend a few days ago, started shooting up with the conflict in West Asia continuing, he said.
He said whenever there is geopolitical trouble or trade tension, investors prefer to invest in gold as the equity market will be down. Gold is the only commodity whose prices remain stable despite economic upheavals, and with a speculation, investors invest in the yellow metal.
‘When conflicts begin, people invest in gold’
KS Keshav, professor of Economics, Bangalore University, said whenever wars or conflicts begin, people usually invest in gold. This has been a worldwide trend. If the war escalates, it will impact the stock market which might crash. But this is not true in the case of gold. “Now with this trend, the demand for gold is increasing. When the demand for the yellow metal is not met, naturally its prices tend to go up globally,” he added.
Prof Keshav said when the Ukraine-Russia war started, a similar trend prevailed. People anticipated that this war would continue for many days and started investing in gold. “However, this trend witnessed a decline to some extent, but the war did not stop,” he added.
Economist RS Deshpande, former director, Institute for Social and Economic Change (ISEC), said gold prices go up drastically, but they will come down. “But when the prices come down, they will not return to their original prices. Usually, they will be slightly above the earlier (older) prices,” he said.