Silver crosses 4 lakh mark, gold up 6 pc as safe haven demand surges

New Delhi, Jan 29 (IANS) Gold and silver prices surged to record highs on Thursday, amid a rise in geopolitical tensions following US President Donald Trump’s threat of military action against Iran.

Strong buying demand, driven by central bank purchases and further weakening of the US dollar, also fuelled the rally.

MCX gold February futures rose 5.99 per cent to Rs 1,75,885 per 10 grams around 10.45 am. Meanwhile, MCX silver March futures rose 4.24 per cent to Rs 4,01,699 per kg.

International markets saw silver hovering around the $120-per-ounce mark, after a more than 60 per cent surge this year, supported by persistent supply constraints.

The strong rally of precious metals came following a firm US Federal Reserve policy stance that kept interest rates unchanged on Wednesday.

After reports of the US increasing military presence in the Middle East, Trump pressured Iran to reopen negotiations over its nuclear programme. He warned that any future military action by Washington would be more severe if Tehran refused to engage.

US gold futures April contracts rose $300 to cross $5,588.71 an ounce, after registering a fresh all-time high of $5,626 earlier.

Analysts said that the earlier resistance band around $5,600 has now decisively turned into a strong support zone, confirming the strength of the ongoing bull phase.

Renewed tariff tensions of the US with key allies and the rising probability of a US government shutdown added to the demand for safe-haven assets. Analysts said that signs of slowing global growth, elevated US debt levels, and a structural weakness in the US dollar place precious metals in a positive outlook for the medium to long term.

Further, cues from the Federal Reserve of lower interest rates over an extended period provide a favourable liquidity backdrop, leading to any minor pullbacks in precious metals being met with strong buying interest, they added.

–IANS

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