Latest Gold Prices: Yellow Metal Shines, 24-Carat Up By Rs 440; Focus On Israel-Hamas Conflict

Yellow metal glittered on Sunday with the price of 22-carat gold rising by Rs 400 and 24-carat up by Rs 440 in per 10 grams. However, the price of silver remained unchanged from the previous day's print. The performance of gold can be attributed to the RBI policy and the upcoming festive season. MCX gold futures as well picked up momentum after international prices gained traction, nevertheless, the weekly performance was broadly volatile.

Gold is expected to see more inflows in the coming days as the geopolitical conflict between Israel and Hamas escalates.

Overall, in India, the 22-carat gold is available at Rs 53,150 per 10 grams on Sunday, rising by Rs 400 compared to the previous day's price of Rs 52,750 per 10 grams. Meanwhile, 22-carat gold in 100 grams climbed by a whopping Rs 4,000 to Rs 5,31,500 compared to the previous day. Also, 1-gram and 8 gram gold in 22-carat jumped by Rs 40 and Rs 320 to Rs 5,315 and Rs 42,250 respectively.

As for 24-carat gold, it is priced at Rs 57,980 per 10 grams, up by Rs 440 from Rs 57,540 per 10 grams of the previous day. Moreover, the 100-gram gold in 24-carat got expensive by a massive Rs 4,400 to Rs 5,79,800 from the previous day. Additionally, 1-gram and 8 gram gold here soared by Rs 44 and Rs 352 to Rs 5,798 and Rs 46,384 respectively.

On the contrary, silver prices were unchanged at Rs 72,100 for 1 kg, Rs 7,210 in 100 grams, and Rs 721 in 10 grams compared to the previous closing.

Last week, on Friday, MCX gold futures for December expiry closed at Rs 56,898, up by Rs 290 or 0.51%. While silver futures expiring in December skyrocketed by Rs 1,522 or 2.3% to Rs 68,290.

On the global front, spot gold stood near $1,809.40 an ounce ounce, while US gold futures came near $1,823.50 an ounce. The 10-year treasury yield in the US jumped to 4.753% and touched a 16-year high of 4.884% earlier in the week. Such performances are due to the hawkish Fed and robust economic data.

Furthermore, the US dollar index strengthened after the surge in U.S. jobs report for September, which has heightened the likelihood of one more rate hike in the upcoming policy Fed. The dollar was at 106.96 against a basket of currencies. U.S. nonfarm payrolls increased by 336,000 jobs in the month under review.

Earlier on Friday, Ravindra V. Rao, CMT, EPAT, VP-Head Commodity Research, Kotak Securities Ltd explained that a higher than forecasted jobs number may trigger another wave of dollar buying and bond sell-off.

However, gold may pick up momentum due to the recent geopolitical tension between Israel and Hamas. Gold is a safe-haven asset and investment here works like magic when it comes to hedging returns in economic uncertainties, geopolitical risk, and overall unstable times.

Reuters reported on Sunday that rising geopolitical risk could see buying in assets like gold and the dollar and potentially boost demand for U.S. Treasuries, which have been sold off aggressively, analysts said.

Both Israel and Hamas entered into a severe war when gunmen from the Palestinian group entered Israel in an unprecedented attack on Saturday. Israel responded with a counterattack. The situation is currently observed by the world, and many Western countries, led by the United States, denounced the attack and have pledged support for Israel.

Apart from this, on October 6th, while keeping the policy repo rate unchanged at 6.5%, RBI decided to increase the monetary ceiling of gold loans that can be granted under the bullet repayment scheme from Rs 2 lakh to Rs 4 lakh for such UCBs who have met the overall PSL target and sub-targets as on March 31, 2023.

RBI said these banks will be required to continue to meet the targets and sub-targets thereafter. Detailed guidelines on the matter will be issued separately.

This move is expected to drive gold demand.

Umesh Mohanan, Executive Director and CEO, of Indel Money said, "The increase in the monetary ceiling of gold loans that can be availed from the Urban Cooperative Banks (UCB) under the bullet repayment scheme from Rs 2 lakh to Rs 4 lakh brings cheer to the gold loan businesses as it is a sign of RBI gradually relaxing gold-backed lending norms in the economy."

Mohanan added, "Though now it is limited to the UCBs that have met the overall Priority Sector Lending (PSL) targets as of March 31 this year, we expect RBI to extend this kind of relaxation in gold loan norms for NBFCs too in the near future *to ensure a level playing field with other lenders."

According to Mohanan, increasing the limit of gold-backed loans is another indication that RBI is incentivizing the lenders that have followed the prudent lending guidelines and the central bank is unperturbed by the recent fluctuations in gold prices. Above all, the enhanced credit limit is a big relief for individuals and small businesses, especially in semi-urban areas, who often rely on cooperative banks to meet their urgent monetary requirements.

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