gold and silver
On Wednesday, gold prices in the national capital rose by Rs 2,900 to Rs 1.55 lakh per 10 grams, while silver reached Rs 2.54 lakh per kg. The reason for this was that due to reduction in geopolitical tension, oil prices softened, due to which the demand for precious metals increased.
According to the All India Bullion Association, the price of gold of 99.9 percent purity increased by Rs 2,900, or about 2 percent. This increased from Tuesday's closing price of Rs 1,52,500 per 10 grams to Rs 1,55,400 per 10 grams (including all taxes).
Silver prices also rose for the third consecutive session. It rose by Rs 3,500, or 1.4 per cent, to Rs 2,54,500 per kg (including all taxes). According to the association, in the last session the price of this metal had closed at Rs 2,51,000 per kg.
Traders attributed the surge in bullion prices to reports that Washington and Tehran were close to finalizing a framework agreement to end the months-long conflict. This has increased the possibility of smooth movement through the Strait of Hormuz and reduced inflation concerns related to energy markets.
Saumil Gandhi, Senior Analyst, Commodities, HDFC Securities, said gold witnessed a strong rally on Wednesday as easing geopolitical tensions led to a sudden reversal of key macroeconomic factors that had recently put pressure on the precious metal. Gandhi said the prospect of a diplomatic breakthrough led to a sharp decline in oil prices and the US dollar, reducing inflation concerns and increasing demand for precious metals.
Globally, spot gold rose $106.15, or 2.33 per cent, to $4,663.70 an ounce, while silver rose $3.40, or 4.68 per cent, to $76.24 an ounce. Jatin Trivedi, VP Research Analyst, Commodity and Currency at LKP Securities, said gold witnessed a strong rise as markets reacted positively to reports that the US and Iran are getting closer to finalizing the outline of a one-page agreement aimed at ending the conflict.
Despite strong gains in the international market, the strengthening rupee limited the rise in domestic gold prices. He further said that the market is now completely focused on the final confirmation of the proposed deal and its implementation. Trivedi said any negative surprise or breakdown in talks could trigger a sharp selloff in gold, while a successful agreement and sustained ceasefire could push gold prices higher in the near future.
