Escalating tensions between Russia and Ukraine triggered safe-haven buying across the globe. Additionally, strengthening of the US dollar and crude prices inching above $102 a barrel supported the rally in the metal prices, analysts said.
By Ruchit Purohit
Gold prices rose sharply on Thursday to hit a 13-month high, surpassing $1,976.50 in the international markets and Rs 52,797 (April contract) per 10 grams on the MCX. Escalating tensions between Russia and Ukraine triggered safe-haven buying across the globe. Additionally, strengthening of the US dollar and crude prices inching above $102 a barrel supported the rally in the metal prices, analysts said.
So far this year, the yellow metal has outperformed other asset classes after underperforming riskier assets in 2021. From $1,796 in January-end, the gold prices surged 10.02% and hit $1,976 on Thursday. Amid the shift of capital allocation from riskier assets to bullion, gold is likely to cross $2,050 in the international markets, as investors will seek refuge in metals amid a possibility of a full-fledged war between Russia and Ukraine, and a subsequent jump in the crude oil prices.
“Gold has edged up on safe-haven buying as Russia-Ukraine tensions intensified with US warning of an imminent attack and imposing fresh restrictions on Moscow. ETF inflows also show buying interest in the metal,” said Ravindra Rao, CMT, EPAT, VP- head commodity research, Kotak Securities.
Speaking to FE, Tapan Patel, senior analyst (commodities), HDFC Securities, said: “Spot COMEX Gold prices are trading 6% up for CY2022, outperforming the other asset classes. COMEX spot gold prices near term resistance lies at $1,970 per ounce, with support at $1,870 per ounce for the short term. The break above $1,970 may lead prices towards the previous high of $2,075 per ounce. MCX Gold April contract has important resistance at Rs 52,500/53,800 per 10 gram, and support at Rs 49,800 per 10 gram.”