By Daksh Grover
New Delhi [India], June 13 : Gold prices in India breached the Rs 1 lakh per 10-gram mark to reach at an all-time high level on Friday, boosted by the weakness in the domestic currency, and rising safe-haven demand as Israel launched an airstrike on Iran.
Gold on Multi Commodity exchange (MCX), as of 10:40 am IST, was up about 1.8 per cent to reach ₹1,00,191 per 10 grams. Gold hit an all-time high at ₹1,00,403 per 10 gram earlier in the session.
"Gold's safe-haven demand due to the Israel-Iran conflict, coupled with a stronger US dollar, has driven Indian (MCX) gold prices to new highs," said Mrinesh Jain, Director, Bombay Bullion Metal Hub LLP.
The Indian rupee witnessed some weakness against the US dollar. A depreciating Indian rupee has made imported gold more expensive, further lifting domestic prices.
On the geopolitical level, Israeli Prime Minister Benjamin Netanyahu on Friday announced the launch of a large-scale military campaign, Operation Rising Lion, aimed at dismantling what he described as an existential threat posed by Iran's nuclear and ballistic missile programmes.
Safe-haven demand drives gold prices up as investors seek a secure store of value during times of economic or geopolitical uncertainty.
Additional support to gold may come as traders now expect a Federal Reserve interest rate cut of 50 basis points by the year-end, starting in September rather than October as previously anticipated, as reported by news agency Reuters.
Lower interest rates generally increase gold's attractiveness by reducing the opportunity cost of holding a non-yielding asset, thus typically boosting its price.
"If there is a sudden spike in gold rates, it would not be surprising. It is likely that gold prices will rise in international markets, as has been observed in recent times. I believe the main reason behind this is the sidelining of the U.S., which has affected the value of the dollar," said Rajesh Rokde, Chairman of GJC.
"For the next week, we expect GOLD prices to find support in the 96,600- 96,400 level range. Trading consistently below 96,400 levels would lead towards the strong support at 95,800 levels and then finally towards major support at 95,100 levels," said Tejas Shigrekar, Chief Technical Research Analyst Commodities and Currencies at Angel One Ltd.
Gold's sister metal, silver, also witnessed an upside. At MCX, as of 10:36 am IST, it was up 0.7 per cent at Rs 1,06,657 per kilogram.
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