Gold prices soar amid heightened tension in Middle East

New Delhi, Oct 5 (IANS) Gold prices continue to rise amid heightened tension in the Middle East, as the precious metal saw a definitive surge this week. The Iran-Israel conflict has kept buyers position intact even after prices were overbought.Gold prices experienced a minor increase on Saturday as the cost of 24 carat gold was Rs 7,785.3 per gram in the morning trade, reflecting an increase of Rs 120. The cost of 22 carat gold was Rs 7,138.3 per gm, an increase of Rs 110 from Friday.

According to Narinder Wadhwa, Managing Director at SKI Capital Services Ltd, in times of geopolitical instability, particularly in the Middle East, gold often serves as a safe haven, while crude oil prices react sharply to concerns over supply disruptions.“The uncertainty fuels a flight to safety in gold and drives energy markets to speculate on potential oil shortages, making both commodities a barometer of global risk sentiment,” said Wadhwa.Trade analysts anticipate that continued easing of interest rates will keep gold buyers interested.However, gold prices dropped by 0.2 per cent to $2,649.69 per ounce globally, as US job growth increased in September as the unemployment rate slipped to 4.1 per cent. US markets closed higher on Friday after a stronger-than-expected jobs data.

According to analysts if geopolitical conditions turn further unfavourable over the weekend, gold prices could further accelerate.

Amid the volatility in global markets, including in India, market watchers have advised investors to stay calm as the situation is likely to improve soon.Stock investors are monitoring the escalating conflict in the Middle East. The pessimism on the market is expected to continue in the near term amid rising crude prices and fund flows to cheaper markets like China.