Gold prices jump after escalation in Iran-Israel tensions. Should you buy in this rally?

Gold rate today in the international market is in the $2,360 to $2,420 per troy ounce range whereas MCX gold rate today is in ₹72,200 to ₹73,500 per 10 gm range, say experts.

Gold rate today: On account of rising geo-political tension in the Middle East region, gold prices witnessed buying interest during the early morning session on Friday. Gold price on the Multi Commodity Exchange (MCX) opened higher and went on to touch an intraday high of ₹72,869 per 10 gm. In the international market, spot gold price also showed upside movement and came close to $2,400 per troy ounce levels in early morning deals. Spot gold price is currently oscillating around $2,395 levels.

Israel-Iran issue in focus

On why gold rates are in an uptrend today, Anuj Gupta, Head of Commodity & Currency at HDFC Securities said, “Gold prices are surging after an escalation in the geopolitical tension in the Middle East. The Middle East tension has risen after reports of Israel’s “missile attack” in an Iranian city, which has fueled the Iran-Israel war.”

On other factors that are fueling gold prices today, Kotak Securities report said, “COMEX Gold prices edged higher amid dollar weakness, improved demand from Chinese buyers and central banks. Fed Chair Jerome Powell flagging a likely delay in the much-anticipated pivot after a series of surprisingly high inflation readings. Swaps markets now see just a 16% chance of a reduction in borrowing costs in June, down from 57% at the end of last month.”

Gold price outlook

Advising a ‘buy-on-dips’ strategy regarding gold and silver prices, Anuj Gupta of HDFC Securities said, “Overall outlook for gold and silver prices are positive. Any dip should be seen as a buying opportunity. In the international market, gold prices are in the $2,360 to $2,420 per troy ounce range. On breaching the upper hurdle, gold prices may go up to $2,450 per troy ounce levels.”

Anuj Gupta maintained that the MCX gold rate today has immediate support placed at ₹72,200 per 10 gm levels whereas it is facing resistance at ₹73,500 per 10 gm level. On breaching this resistance, MCX gold rates may go up to ₹74,250 to ₹74,300 per 10 gm levels in the near term.

Israel-Iran war news

Israel launched missile strikes against Iran during early hours on Friday morning (local time), ABC News reported citing a senior US official. The report came shortly after local sources reported blasts in Isfahan region in Central Iran.

“Iran’s Fars news agency reported three explosions were heard near an army base in the central city of Isfahan. An Iranian official told Reuters there was no missile attack and the explosions were the result of the activation of Iran’s air defense systems,” reported Reuters.

Iran’s air defence systems were activated in several locations after multiple explosions were heard close to the airport and an army base in the Iranian city of Isfahan, state media reported early Friday morning.

The missile launches come after Iran launched an offensive on targets around Israel on Saturday last week, according to Israeli military authorities, in which the nation fired a barrage of over 300 unmanned drones and missiles.

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