Gold prices could rise as doubts remain over US-Iran ceasefire

Hyderabad: Even as the USA and Iran have agreed on a two-week ceasefire, the Indian bullion market is sceptical about the future and expects gold to go bullish in the coming days.

Experts believe that gold prices will witness a sharp rise with the uncertainty over the truce, especially with the Israel-Lebanon conflict refusing to die down.

Experts also believe that any fall in the gold and silver prices will be temporary and driven by the immediate sentiments of the ceasefire.

The shaky ceasefire

On Wednesday, the USA and Iran had agreed upon a two-week ceasefire with Israel, too, accepting the same. However, Israel had refused to involve Lebanon in the ambit of the ceasefire and continued to attack the latter, targeting the Hezbollah sites.

Kumar Jain, National Spokesperson for the India Bullion and Jewellers Association, said that there will be bullishness in the gold price due to the war. “Gold always goes up during the war because the yellow metal is considered to be a safe haven,” he said.

He also said that other reasons, such as diminishing trust in dollars and central banks across the world buying gold to enhance their reserves, will also push up the demand.

How much price rise is expected?“The war will continue and gold will rise after Akshaya Tritiya, which falls on April 19,” Jain said, adding that they expect the price to go up in the range of Rs 2 lakh per 10 grams in the coming months because the countries involved in the war are speaking different languages on the ceasefire.

“Besides, there is no certainty over the Israel-Lebanon situation,” he pointed out.

Akshaya Tritiya is considered to be an auspicious day to buy gold in the Hindu calendar, and the wedding dates falling in May to July will also lead to a surge in the demand for jewellery. Jain said that in case of the soaring price, people will recycle gold by exchanging old jewellery with the new ones.

More interest in investing in gold than land now

Expressing similar sentiments, Cyber Crime Advocate Pankaj Bafna, who has a family jewellery business, also said that gold prices are definitely going to increase.

“In Dubai, also now, people are trusting gold more for investment,” he said, adding that they had two options: property and gold. “However, they have seen the losses after the West Asia war started, so their faith is tilted towards gold now,” Bafna said.

He added that gold is a real asset and a global currency that can be exchanged anywhere in the world. “The younger generation’s outlook towards investment in gold has also changed since the war. Now they have started trusting gold as an asset, which was not the case so far,” he concluded.