Gold price today at Multi Commodity Exchange (MCX) ascended to its highest levels in more than a year. MCX gold rate today surged ₹2,250 to ₹52,630 per 10 gram while silver jumped 5% to ₹67,926. In spot market, gold price breached its $1925 hurdle and has hit $1950 per ounce levels, around 13 month high. According to market experts, this sharp rise in yellow metal price is because of the escalating tension in Russia Ukraine crisis. They said that spot gold price has broken its $1935 per ounce hurdle and now it may soon go up to $1950, $1980 and then $2000 per ounce levels.
They said that Ukraine declared a state of emergency on Wednesday and told its citizens in Russia to flee, while Moscow began evacuating its Kyiv embassy in the latest ominous signs for Ukrainians who fear an all-out Russian military onslaught. So, speculations are high about Russia attacking Ukraine and hence demand for save haven has suddenly gone northward.
Speaking on reason for sharp upside movement in gold price today; Amit Sajeja, Vice President — Research at Motilal Oswal said, “Gold has breached its $1925 hurdle and now it has surged up to $1950 levels. So, next targets for spot gold price is $1980 and $2000, which might be achieved in short term. This rise in gold price today can be attributed to fresh developments in Ukrain Russia crisis where speculation are high about Russia attacking Ukraine anytime.”
Inflation to remain a big worry
Expecting sharp rise in inflation if the Ukraine crisis goes down to severe level; Anuj Gupta, Vice President at IIFL Securities said, “Crude oil price has hit $100 per barrel and it may further appreciate near 10 per cent hitting around $110 per barrel in global markets. This is expected to fuel global inflation, which has already reached to an alarming level.”
Rupee vs dollar
Expecting rupee to feel the heat if oil prices continue to risae northward; Amit Sajeja of Motilal Oswal said, “Rupee has been able to appreciate against US dollar despite escalation in Russia Ukraine crisis. This could happen because of the FDI flow in India and Reserve Bank of India (RBI) announcing sell-buy-swap for US dollar against Indian rupee. However, these triggers won’t be enough if crude oil prices continue to rise. So, gold price may get support from both global and domestic triggers if Russia Ukraine tension gets prolonged.”
Expecting further rise in gold price, Anuj Gupta of IIFL Securities said, “Selloff in global equity market is also supportive for gold prices as portfolio diversification from equity to gold may further push yellow metal northward. At MCX, gold rates are expected to go around ₹52,500 to ₹53,000 levels. Those who bought gold recently are advised to hold the yellow metal for this target at MCX in short term.”
However, he strictly advised gold buyers to remain vigilant about the latest developments in Russia Ukraine crisis as single positive development may lead to sharp fall in the precious yellow metal as well.
Suggestion for small investors
Speaking on Russia Ukraine latest news development; Vidit Garg, Director at MyGoldKart said, “As of now when we write AFP has reported that Russian president decides to conduct military operations in Ukraine which has ignited fire in the market and lead to almost 2 years high for Gold.
Though it’s a news based market now and technicals will have very less role to play but still 1912 will act as a major support for now while 1956 as resistance.” He advised small traders to stay away from this volatility.
