Mumbai: Spot gold prices on Monday crossed Rs 42,000 per 10 gram for the first time owing to the escalating US-Iran tensions.
Prices of the safe haven asset surged as Iran on Sunday said it will no longer abide by any of the limits imposed by 2015 nuclear deal, sparking fears of a military conflict.
This comes following the US attack and killing of a top Iranian military Commander Qasem Soleimani. Besides, Iraq's parliament urged its leaders to expel US-led coalition troops from the country.
On the MCX, gold for February delivery touched a high of Rs 41,096 per 10 gram. In dollar terms, it touched the highest level in 7 years at $1,587 an ounce.
The yellow metal also drew support from the weakening rupee against the US dollar, as India is one of the biggest importers of gold. The rupee closed at Rs 71.94, lower by 13 paise, to a US dollar before falling as much as 72.11.
"Escalating tensions may dent market risk appetite and weigh down on riskier assets like global equity markets and commodities like base metals," said Ravindra Rao, VP and Head Commodity Research of Kotak Securities.