Gold Regains Momentum as Israel-Iran Tensions Reignite Safe-Haven Demand

Gold is once again gaining momentum as geopolitical turbulence is driving up demand for the safe-haven asset. The yellow metal has seen a surge in investor interest amid rising tensions in West Asia. The US administration has reportedly evacuated personnel from its embassy in Iraq as tensions escalate between Israel and Iran.

“They are being moved out because it could be a dangerous place, and we’ll see what happens,” US President Trump reportedly said in a media briefing. “We’ve given notice to move out," he added.

On Comex, gold prices rallied sharply, rising by $50 overnight as concerns over the US debt ceiling renewed.

"Escalating geopolitical tensions with Iran triggered a flight to safe-haven assets. The rally pushed Comex gold above $3370, while MCX gold surged by ₹1,200 to cross ₹98,000. The broader uptrend in gold remains intact, with heightened sensitivity to geopolitical developments fueling fresh buying interest," said Jateen Trivedi, VP research analyst- commodity and currency, LKP Securities.

Investors are now flocking to the safe-haven asset class. Recently, silver metal also witnessed a robust surge in price levels. On top of that, investors are expecting a cut in interest rates by the Federal Reserve, owing to stabilised inflation figure.

"Gold prices rose on the back of cooler-than-expected US inflation numbers, strengthening investor expectations that the Federal Reserve would start cutting interest rates by September. Data showed the CPI increased 0.1% last month after rising 0.2% in April, against the estimates of 0.2% and increasing 2.5% year-on-year," said Manav Modi, senior analyst, commodity research at Motilal Oswal Financial Services.

On Thursday, the rate of 24-carat gold (per 10 grams) stood at ₹99,430 price level, in the Delhi NCR region, as per GoodReturns.

Key Levels to Watch

"Technically, key support remains at $3290 on Comex and ₹96,000 on MCX, while immediate resistance is seen at $3400 and ₹99,500 respectively," Trivedi said.

Analysts expect the uptrend to continue, albeit at a gradual pace, as major geopolitical events continue to unfold.