Gold prices in India have surpassed ₹76,000 per 10 grams for the first time. This surge has been noted in major cities like Delhi, Jaipur, Lucknow, and Chandigarh, according to Good Returns data.

The increase is driven by a combination of global economic factors, including interest rate cuts by the Federal Reserve and heightened geopolitical tensions.

Global influences on gold prices

On the international front, spot gold climbed 0.2% to $2,628.28 per ounce, reaching an all-time high of $2,630.93 per ounce earlier in the session.

Non-yielding gold has risen over 27% this year, poised for its most significant annual gain since 2010.

US gold futures also reflected this upward trend, increasing by 0.3% to $2,653.00 per ounce.

Tim Waterer, Chief Market Analyst at KCM Trade, explained the factors behind this surge: “The current state of play in the global economy, which consists of declining interest rates and geopolitical risks, has suited gold to a tee.”

The US Federal Reserve recently initiated a rate-cutting cycle, beginning with a half-percentage point cut and signaling more reductions by year-end.

As interest rates drop, the opportunity cost of holding gold diminishes, making it more attractive for investors.

Geopolitical tensions drive demand

Geopolitical risks are also influencing gold prices. Recent exchanges of fire between Hezbollah and Israel have escalated tensions in the Middle East, leading to increased demand for safe-haven assets like gold.

Renisha Chainani, Head of Research at Augmont, noted that escalating concerns in the region have led to greater allocation toward gold, reinforcing its status as a protective investment.

“The next psychological level of resistance for gold is $2,700 per ounce” Chainani stated. “With geopolitical tensions continuing, the outlook for gold remains bullish.”

Investment considerations

For investors, this moment presents both opportunities and challenges.

The market is currently favoring gold due to its status as a non-yielding asset in a low-interest-rate environment.

As Prathamesh Mallya, DVP of Research at Angel One Ltd, mentioned, “Gold prices are likely to remain bullish due to geopolitical tensions.”

Investors should consider these dynamics when making investment decisions.

As the Federal Reserve continues its monetary easing and geopolitical uncertainties loom, gold could become an increasingly attractive option for those seeking to hedge against market volatility.

–With Reuters inputs