Trading opened for the week with the gold rate in India surging to near 7-year high levels on account of the US-Iran conflicts which spurred investor demand for the safe-haven asset.
On 6 January 2020, gold in India was recorded trading as high as Rs.40,700 per 10 grams after an increase in safe-haven buying led to prices surging by Rs.700 from the previous session.
With investors and market participants hedging on the bullion against the escalating US-Iran tensions, gold continued trading near its 7-year high in the commodity market.
Escalating political tensions between the United States and the Iranian counterparts coupled with an increased safe-haven demand resulted in gold prices in India holding steady at Rs.40,700 per 10 grams on 7 January 2020.
With Iran retaliating against the United States’ airstrike by targeting a US-occupied Iraqi airbase on Wednesday, investors gravitated towards the safe-haven asset.
The gold rates in India surged by Rs.450 to Rs.41,150 per 10 grams on 8 January 2020 as investors flocked to the bullion after Iran’s retaliatory attack against the US forces.
However, gold prices dropped by over 2.5% the next day in India after the US President Donald Trump eased worries of a possible war with Iran with a statement.
Rates dropped by Rs.1,150 per 10 grams the next day as the US President Trump allayed worries on the Middle East conflict due to which the risk-appetite for investors gradually picked up.
On 9 January 2020, gold in India was recorded trading at Rs.40,000 per 10 grams before dropping further by Rs.70 to trade at Rs.39,930 per 10 grams on 10 January 2020 amid the weak trend overseas.
The rest of the week, however, saw the gold prices in India gradually picking up the lost ground on account of the market uncertainties that rose after the US released fresh sanctions against Iran.
Gold was recorded trading at Rs.40,000 per 10 grams on 11 January 2020 before closing at Rs.40,010 per 10 grams for the week on 12 January 2020 with subdued but steady demand amid the uneven cues overseas.
For any clarifications/feedback on the topic, please contact the writer at viswanathan.v@cleartax.in
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