Gold, Silver Gain By Up To 5% In The Previous Session: What Next?

Gold and silver prices in the previous day's trade on mounting Ukraine-Russia tensions, after Russia launched military action against Ukraine, zoomed as much as 5% to day's high price on the MCX of Rs. 52,797 per 10 gm. Similarly, silver futures also scaled to day's high of 68097 per kg. Nevertheless, settled higher with gains of 2.28% and 2.29%, respectively. This price hike by such a bountiful amount in a day is highly unusual.

Gold prices in the international markets

Again at the time of writing this copy at around 6:43 am or 20:12 NY time, spot gold is up by 0.59% at $1914.8 per ounce. Gold futures meanwhile traded negative with a cut of 0.5% at $1916.10 per ounce. Earlier, gold hit a 1.5 year high of $1976.5, while silver made a seven-month peak of $25.67. This was as safe-haven demand took over due to the jittery geo-political tensions. Nevertheless as by mid-day most markets eased significantly including treasury yield, both metals have backed way off their earlier gains.

Gold price outlook amid geo-political tensions and high inflation

As the Ukriane-Russia tension continues, there is a view that gold price can go higher sharply in the near term. As per experts, gold prices are expected to hit Rs. 55000 levels this year ad Rs. 62,000 in the next year.

"Outlook on gold is very bright on account of two reasons. One is the geopolitical event, which can become a full fledged war between Russia, the European and the NATO allies. Apart from that, now there is going to be economic slowdown and a higher inflation across the world. So I don't think that central banks can now raise the interest rate and that will lead to another spike in inflation across the world." says Kunal Shah, Head of Commodities Research at Nirmal Bang.

Shah added, "I am expecting gold prices to shoot up and test levels of Rs 54,000-Rs 55,000 in this year and in next year Rs 60,000-Rs 62,000. So, on an average gold will go up at least by 10,000 rupees in next two years."

Also, amid record inflows into Gold ETFs on the back of geo-political tensions will also fuel further price rise of gold.

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Disclaimer:

The views on gold regarding its price are as given by experts. So please take your call on the safe haven yellow metal after your own due diligence.