NEW DELHI: Gold prices continued to move higher on Tuesday as geopolitical concerns intensified. Heightened tensions between Russia and the West over Ukraine prompted investors to pull back from riskier assets and opt for safe-haven bullion.
Gold futures on MCX were trading up by 0.57 per cent or Rs 286 at Rs 50,202 per 10 grams. Silver futures jumped 0.50 per cent or Rs 323 at Rs 64,556 per kg.
Bullion is usually perceived as a hedge against geopolitical conflicts, and with simmering tensions surrounding Ukraine, spot gold has closed higher in nine of the previous 11 sessions.
However, market experts believe that gold may remain volatile this week following the sharp run-up, which may be followed by profit-booking if sentiments improve.
Ravi Singh, Vice President and Head of Research, ShareIndia said traders and investors are showing keener risk aversion as the US says Russia could invade Ukraine any day now.
“The uncertainty is likely to continue to run high, as the US response to a Russian invasion of Ukraine is a wild card- running the gamut of the US slapping more sanctions on Russia to participating in a full-blown ground war in Europe,” he added.
In the spot market, the highest purity gold was sold at Rs 49,752 per 10 grams while silver was priced at Rs 63,910 per kg on Monday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have jumped about Rs 2,000 per 10 grams in the month of February so far, whereas Silver has surged about Rs 3,200 per kg in the last eight trading sessions.
Trading strategy
“We expect gold prices to trade higher with COMEX Spot gold support at $1,860 and resistance at $1,890 per ounce. MCX Gold April futures support lies at Rs 49,700 and resistance at Rs 50,400 per 10 gram,” Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Global markets
Spot gold was up 0.1 per cent at $1,871.52 per ounce, as of 0052 GMT. In the previous session, bullion prices marked their highest level since November 16 at $1,873.91. US gold futures edged 0.2 per cent higher to $1,873.40.
Among other precious metals, spot silver gained 0.2 per cent to $23.87 per ounce, while platinum was up 0.2 per cent at $1,030.11. Palladium rose 0.3 per cent to $2,368.33, having hit its highest in nearly two weeks on Monday.