Gold price continues to rise amid growing geopolitical tensions

Gold rose on the Multi Commodity Exchange (MCX) on Monday as prices of the precious metal shot up to a record high in the international market amid rising geopolitical tensions in Central Asia.

Gold futures, maturing on June 5, 2024, stood at Rs 70,981 per 10 grams on the MCX, after recording an increase of Rs 345 or 0.49 per cent over the previous close of Rs 70,636.

In the international market spot gold was up 0.6 per cent at $2,343.89 per ounce after hitting a record high of $2,353.79 earlier in the session.

Gold prices have risen by 12 per cent so far this year with central banks buying the yellow metal in large quantities and the increases safe-haven demand for the precious metal amid escalating tensions due to the Israel-Hamas conflict and no end in sight to the Russia-Ukraine war.

The reduction in interest rates signalled by the US Fed also leads to an increase in gold buying as investors see lower returns on the financial assets.

The price of 24-carat gold in Delhi on Monday was hovering around Rs 71,430 per 10 gms while in Mumbai it was around Rs 71,280 per 10 gms. The price in Chennai was higher at Rs 72,150 per 10 gms.

The demand for gold in the Indian market is fuelled by the need for precious metal in marriages as it is gifted to brides and grooms in large quantities as jewellery.

However, jewellers are of the view that the soaring gold prices are dampening this demand. This is also reflected in the declining imports of the precious metal, according to them.