Latest Rates & Market Trends: Gold Prices Decline Amid India-Pakistan Tension
History has shown that gold prices are susceptible to geomilitary activities; the latest flare-up between India and Pakistan has again done its act on the precious metal rates. Globally, the price of gold had risen 1% on account of a weakening dollar, while in domestic markets in India, demand for safe havens created fluctuations.
In this blog, we’ll explore:
- Current gold rates in India & international markets
- How India-Pakistan tensions are affecting gold prices
- Expert predictions on future trends
- Why investors turn to gold during geopolitical crises
Gold Price Trends in India
Domestic Market Update (May 9, 2024)
- Gold (99.9% purity) surged by ₹480 to ₹99,730 per 10 grams in Delhi.
- Silver prices also climbed ₹200 to ₹98,400 per kg.
Why the Sudden Increase?
- Geopolitical Tensions: Rising India-Pakistan tensions have increased demand for gold as a safe-haven asset.
- Global Market Influence: A weaker US dollar and ongoing trade uncertainties contributed to the uptick.
International Gold Market Trends
Spot Gold Performance
- Gold rose 1.1% to $3,341.84 per ounce on Friday.
- Weekly gain: 3.2% due to economic uncertainties.
- Year-to-date surge: Over 27%, making gold one of the best-performing assets in 2024.
Silver & Futures Market
- Spot silver increased by 0.23% to $32.54 per ounce.
- US gold futures climbed 1.3% to $3,347.20.
How India-Pakistan Tensions Impact Gold Prices
- Safe-Haven Demand
Prices of gold in the adverse geopolitical scenario head towards the roof. - The recent military skirmishes and diplomatic tensions served to stoke the demand for gold in India.
- Currency & Import Costs
A weaker Indian Rupee (INR) makes gold imports more expensive, pushing domestic prices higher. - Market Sentiment
Chintan Mehta (Abans Financial Services):
“Gold prices are steady, but India-Pakistan tensions, along with the Russia-Ukraine war and Middle East conflicts, could keep prices supported.”
Expert Predictions: Will Gold Prices Keep Rising?
Short-Term Outlook
Saumil Gandhi (HDFC Securities):
“Federal Reserve policy decisions strengthen or weaken the US dollar and in turn affect gold’s price.”In the event of higher risk, gold might attempt a price test of ₹1,00,000 per 10 grams in India.
Long-Term Trends
With inflation all over the world and the continual policies of respective central banks and the rise of geopolitical risk, gold prices will mount further.
some analysts advocate holding 10-15% of portfolios in gold as a hedge.
FAQs: Shifts in Gold and Geopolitical Tensions
- Why does gold price go up during India-Pakistan tensions?
Gold has traditionally been a safe-haven asset. During conflict periods, investors go from volatile stocks to safe gold, pumping demand and prices. - What was the highest gold price in India in 2024?
Gold prices assaulted the psychological level of ₹1,00,000 in May 2024 when it was trading at ₹99,730 per 10 gms. - What effects does the US dollar have on gold prices?
Gold is globally priced in terms of the USD. A weak dollar makes gold cheaper for foreign buyers and thus increases demand and prices of gold. - Should I buy gold now or wait?
Short-term traders: Watch Fed policies and geopolitical developments.
long-term investors: Gold is a good hedge; consider SIP in gold ETFs or sovereign bonds. - Will silver prices also rise with gold?
Yes, silver often follows gold trends but is more volatile due to industrial demand.
6. What other factors influence gold prices?
- Interest rates (higher rates reduce gold’s appeal)
- Inflation (gold is a hedge against rising prices)
- Central bank gold purchases (increases demand)
Conclusion: Is Gold Still a Safe Bet?
With rising India-Pakistan tensions, global conflicts, and economic uncertainties, gold remains a top choice for risk-averse investors. While short-term corrections are possible, long-term trends suggest gold prices will stay bullish.
