Ultimately, it appears that the flashpoint in the US-Iran face off in Iraq was just a storm in a tea cup. The markets went into turmoil as news about Iranian missiles slamming into US military bases in Iraq went viral late on 7 th night. However, as both parties not ready to escalate matters as yet at the moment things calmed down rapidly. All the markets including, stock markets, currency markets as well as gold markets turned volatile.
In the international market, gold soared to $1,613 per ounce against a close in New York of around $1,565-69 per ounce on the 7 th. It then declined and declined in New York to around $1,560 per ounce. The rupee declined to well over Rs.72 to a dollar before recovering slightly to around Rs.71.53. The domestic gold price rose sharply from the previous close of Rs.40537 per 10 gms on the 7 th to open the day at Rs.41253 per 10 gms and closed the day at Rs.40,851 per 10 gms in Mumbai.
The volatility in the gold price could kill demand for sometime as buyers/investors could adopt the wait & amp; watch policy. While the high price could trigger increase in the sale of scrap, there could be some investors who could go long on gold in anticipation of higher gold prices in the year ahead. Both types of investors could wait for prices to stabilise first. The gold price could end much lower on the 9 th.In an election year in the US coupled with impeachment proceedings against its president any escalation in the middle could become a rallying point for the incumbent. Even Iran could wait for an opportune time before striking again at the US interests again. For, they had warned that their revenge could be not be just one strike. There is still much more to come over the middle east saga.
Gold (Rs.per 10 gms) am pm
Jan 7 40488 40537
Jan 8 41253 40851
Here’s how much will your Rs 10,000 be worth in a year if invested in Equity, NIFTY or Gold?
Disclaimer: This is not a guide for speculators.
