Following the surprise attack by Hamas on Israel and Israel's subsequent offensive this weekend, the precious metals market in India displayed mixed trends today (October 10). As the conflict in West Asia escalates, it has had ripple effects beyond the financial markets.
Gold on India's Multi Commodity Exchange (MCX) showed a slight increase, with maturing on December 5, 2023, standing at Rs 57,744 per 10 grams, representing a marginal hike of Rs 98 or 0.17 percent from the previous close.
On the other hand, the stock market has seen wider price swings on Monday (October 9), as investors looking to invest might have diverted their money into more stable avenues. The prices related to Israeli companies specifically saw a steep hit as the market opened on Monday.
However, the prices picked up on Tuesday (October 10).
Comments from top Federal Reserve officials in the USA could also have played a role in gold's recent rally.
Fed Vice Chair and Dallas Fed President suggested that, as long-term interest rates are on the rise, the Fed might be less likely to increase short-term interest rates. Consequently, investors are considering gold as a short-term investment option in the wake of the war.
Some experts also believe that the ongoing conflict in West Asia could continue to bolster gold prices in the near future.