Gold Hits Record High as Global Tensions Mount

Gold prices in India reached a new all-time high, fueled by the dovish outlooks of central banks, declining bond yields, and increased geopolitical tensions. Market experts point to potential Federal Reserve rate cuts and global unrest as key drivers of this precious metal's surging value.

In a remarkable surge, gold prices in India scaled an unprecedented high, as recorded by the Multi Commodity Exchange (MCX) on Thursday, marking the peak at Rs76,899 per 10 grams. The hike is attributed to a mix of dovish central bank outlooks, waning bond yields, and escalating geopolitical tensions, experts say.

Ajay Kedia, Director of Kedia Advisory, divulged these insights exclusively to ANI. He noted, "The MCX Gold milestone was driven by central banks' dovish stances and marginally lower bond yields, increasing the lure for the non-yield-generating bullion." The prediction of potential Federal Reserve rate cuts later this year further catalyzes this upward momentum, as a possibility of a 25-basis-point reduction in November looms.

Compounding this situation is uncertainty surrounding the US presidential election and rising Middle Eastern tensions, highlighted by Israel's recent air strikes on Lebanon. Kaynat Chainwala, AVP-Commodity Research at Kotak Securities, pointed out the parallel rise of global gold prices, supported by declining US Treasury yields and bolstered safe-haven demand. Despite minor retreats due to a stronger dollar, the escalating geopolitical unrest underpins gold's current appeal, ensuring its position as a secure investment amid volatile international dynamics.

(With inputs from agencies.)