Mumbai: Gold prices soared past Rs 1 lakh per 10 grams on the Multi Commodity Exchange (MCX) on Friday, as rising tensions between Israel and Iran pushed investors to buy safe-haven assets like gold. The jump in prices was also supported by weak U.S. economic data and hopes of interest rate cuts by the Federal Reserve.
At the start of the day, MCX gold opened higher by Rs 1,108 at Rs 99,500 per 10 grams. It later climbed to a high of Rs 1,00,403. Around 9:50 AM, it was trading at Rs 1,00,233, up 1.87 percent from the previous close of Rs 98,392.
Silver prices also rose. MCX silver opened at Rs 1,06,450 per kg, up Rs 565 from the previous close of Rs 1,05,885. It reached a high of Rs 1,06,748 and was trading at Rs 1,06,545 at 9:50 AM, up 0.62 percent.
International gold prices also went up sharply. Spot gold touched USD 3,428.28 per ounce, its highest since May 7. U.S. gold futures moved up 1.4 percent to USD 3,449.60. The rise in gold prices this week has been over 3.5 percent.
The rally came after Israel launched airstrikes on Iran, targeting nuclear and military sites. The move raised fears of a bigger conflict in the Middle East. When tensions like this rise, people often turn to gold as it is seen as a safe investment.
Gold prices also got support from weak economic numbers in the U.S. The Producer Price Index (PPI) rose just 0.1 percent in May, showing low inflation. Jobless claims were also high for the second week in a row. These signs made investors think the U.S. Federal Reserve might cut interest rates soon.
Kaynat Chainwala from Kotak Securities said that gold is getting a boost not just from the Israel-Iran conflict, but also from global worries like trade tensions and a weaker U.S. dollar. Gold even went past USD 3,460 per ounce in the latest session.
Markets are now waiting for U.S. inflation expectations data from the University of Michigan report to get more clues on interest rates.
