Demands for Safe-Haven Investment Takes Gold Prices To $2,050

8 August 2022
3 mins read
Demands for Safe-Haven Investment Takes Gold Prices To $2,050

The prices of silver and gold soared in the Indian markets, with global demands of metals increasing due to Russia’s invasion of Ukraine. On the other side, the global stock markets recorded a downward trend in the past couple of weeks. The geopolitical tension and soaring oil prices have become the primary factor behind the rising demand for safe-haven investments such as gold.

International Stock Market News

  • The yellow metal traded 1.13 per cent higher on COMEX at $2,065 on 9 March 2022 at 9:24 a.m.
  • A 2.02 per cent jump in MCX silver prices were recorded before closing at 71,385 levels.
  • In the spot market, silver closed at $26.37 levels after touching high levels of $26.94.
  • At 0133 GMT, Brent crude futures recorded a rise of $2.17, or 1.7 per cent at $130.15 a barrel, with a 3.9 per cent rise the previous day.
  • Wall Street indices dropped on Tuesday as inflation concerns soared with increasing oil prices.

India Share Market News

  • A 1.67 per cent gain on MCX gold April contract was recorded at Rs. 55,128.
  • A 2.28 per cent jump in Silver May contract was recorded to Rs. 73,014 at 9:30 a.m. on 9 March 2022, Tuesday.
  • MCX gold prices recorded a high level of 55,558, increasing by 1.32 per cent before closing at Rs. 54,224 levels.
  • The yellow metal touched a high of $2070.20 per ounce in the spot market.
  • MCX Silver prices closed at 71,385 after a jump of 2.02 per cent.

Experts Testimony

According to the statement of Anuj Gupta from IIFL Securities, gold can be bought by the traders at Rs. 54,000 to Rs. 54,200 levels. The stop loss will be at 53,400 levels with a target of 55,000 levels. Further, with a target of 73, 000 levels and a stop loss of 69,800 levels, silver can be bought by traders at Rs. 71,000 to Rs. 71,300 levels.

He further stated that silver and gold may test $27 and $2100, respectively, in the near future. Additionally, the rise of oil prices and war is the primary factor behind the demands of haven investments.

Final Thoughts

Russia’s invasion of Ukraine has brought huge turmoil in global stock markets and commodity markets. The impact is evident with the massive rise in gold prices while global stock markets slumped. With US sanctions on Russia’s import of oil and other commodities, the demand for safe-haven investments increased significantly.

Gold gained as the stock markets globally continued losing the streak owing to the geopolitical tensions between Russia and Ukraine coupled with US sanctions. This gold rush has resulted from massive safe-haven investments triggered by fears of rising inflation in the ongoing volatile market. Furthermore, the supply shortage concerns and robust demands have contributed to keeping the prices higher.

Frequently Asked Questions

  1. Why is the gold price increasing?

The fears of inflation, with US sanctions on Russia, geopolitical tension, and robust demands have increased the gold prices while inflicting a slump in the stock market.

  1. What is a downward trend in the stock market called?

A downward trend or downtrend refers to a slump in security prices, which fluctuates with time.

  1. What is a safe-haven investment?

It is an asset used to offset an investor’s portfolio exposure to limit the risk of a negative shock.

Disclaimer – This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.