Gold prices surged on Thursday, April 18, as persistent geopolitical tensions in the Middle East added to the yellow metal's appeal despite robust economic data from the US that raised prospects of fewer interest rate cuts. In the Middle East, Israel has signalled that it will retaliate to a volley of attacks from Iran despite calls for a restrain from Western countries.

Bullion's upside came despite data showing US weekly jobless claims were unchanged at low levels last week. Strong US economic data and hawkish remarks from Fed officials have prompted investors to drastically rethink the chances of the Federal Reserve cutting rates any time soon.

Why are gold, silver prices flirting with record highs despite resilient US dollar? — explained with 5 reasons

Gold Prices Today

Higher interest rates reduce the appeal of holding non-yielding gold. Spot gold firmed 0.8 per cent at $2,378.53 per ounce. Gold prices touched an all-time high of $2,431.29 last Friday. US gold futures rose 0.2 per cent to $2,392.90. Spot silver rose 0.5 per cent to $28.36 per ounce. Platinum was flat at $938.15, and palladium gained 0.8 per cent to $1,034.50, according to news agency Reuters.

Back home, gold prices fell from an all-time high level and traded lower by ₹250 at ₹73,700 per 10 grams amid a decline in the yellow metal's rates in the global markets, according to HDFC Securities. The precious metal had settled at ₹73,950 per 10 grams in the previous session. However, silver prices remained flat at ₹86,500 per kg.

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Analysts said that when there are geopolitical tensions, the natural response is for investors to flee to gold, which is happening now. If the conflict further escalates, prices could go north of $2,500-$2,600, and if there is a ceasefire, then they could fall to $2,200.

They added that with Fed rate cut expectations from the Fed coming down and with the natural profit-taking that comes when prices rally quickly, there might be some pressure on gold, but a sharp decline is unlikely.

Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities said, ‘’Gold prices were in the green at 72,650, up by ₹120, as Comex Gold demonstrated strength from lower levels around 2350$. However, significant resistance is observed at the 2400$ mark, limiting further gains.''

‘’Ongoing geopolitical tensions in the Middle East are expected to keep gold volatile. In the event of an escalation in the situation, the dollar may find support, dampening gold prices. Conversely, if tensions ease between Iran and Israel, gold could experience profit booking, potentially driving prices down towards 69,500,'' added Trivedi.

ABOUT THE AUTHOR Nikita Prasad Nikita covers business news and has been producing news on digital platforms since 2018. She writes on economy, policy, markets, commodities, industry. Her core areas of interests include infrastructure, energy, oil and gas, railways, and transport/mobility. She has worked for business news channels like Moneycontrol, NDTV Profit, and Financial Express in the past. If you have story ideas/pitches/reports or quotes/views to share, reach her at [email protected]. Read more from this author