Gold nears Rs 1-lakh mark as India-Pakistan tensions, Fed signals spark flight to safety

A day after India destroyed nine terror camps in Pakistan and Pakistan-occupied Kashmir (PoK) and amid escalated tensions, gold prices saw a notable increase on Thursday, with 24-carat gold climbing by Rs 750 to reach Rs 99,750 per 10 grams. This surge was driven by investors turning to safe-haven assets amidst mounting economic uncertainties and geopolitical instability.

Earlier in the day, gold prices in India saw a significant rise on Thursday, as 24-carat gold increased by Rs 600 to reach Rs 99,600 per 10 grams. The price per gram also went up by ₹60 to Rs 9,960, as investors sought refuge in safe-haven assets amidst growing economic and geopolitical uncertainties within the country.

In a significant escalation, Pakistan made an attempt to target various military installations in Northern and Western India, such as Awantipura, Srinagar, Jammu, Pathankot, Amritsar, Kapurthala, Jalandhar, Ludhiana, Adampur, Bhatinda, Chandigarh, Nal, Phalodi, Uttarlai, and Bhuj, utilizing drones and missiles. Fortunately, all of these attempted attacks were effectively thwarted by India's Integrated Counter-UAS Grid and Air Defence systems. As per reports, authorities are currently in the process of recovering debris from multiple locations, which serve as concrete evidence of the cross-border assaults.

Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities, said: "Gold prices remained highly volatile as multiple global and domestic triggers played out simultaneously. In international markets, Comex gold slipped sharply from $3,400 to $3,320 following US President Trump’s announcement of a potential “biggest trade deal,” triggering profit-taking across safe-haven assets. Meanwhile, MCX gold fell by ₹1,400 to ₹95,500 before rebounding sharply towards ₹97,000, driven by a weakening rupee and escalating border tensions between India and Pakistan. The combination of geopolitical stress and rupee depreciation has kept domestic gold resilient despite global softness. The broader range for gold is now seen between ₹95,000 and ₹98,000. A breakout on either side could trigger a 3–4% directional move in the coming sessions."

On the global front, spot gold prices climbed by 0.9% to $3,392.90 per ounce as of 0416 GMT, while US gold futures saw a slight uptick of 0.2% to $3,399.80. This surge came after the US Federal Reserve opted to maintain interest rates at current levels, while cautioning about the potential risks of rising inflation and weakening labor market conditions—factors that bolstered expectations of potential rate cuts in case of economic slowdown.

Jigar Trivedi, a senior commodity analyst at Reliance Securities, highlighted the focus on the Fed's recent statement in the gold market. The Fed's concerns over inflation and unemployment risks have made gold an attractive option as a hedge in the current market environment.

“The focus in the yellow metal market was on the Fed’s statement,” said Jigar Trivedi, senior commodity analyst at Reliance Securities. “They flagged risks of higher inflation and unemployment, which is keeping gold attractive as a hedge.”

Adding further support to gold’s momentum was President Donald Trump’s tough stance ahead of US-China trade talks, as he refused to offer tariff concessions. This reinforced gold's appeal as a non-yielding, safe-haven asset.

Gold had surged to an all-time high of $3,500.05 per ounce on April 22. Analysts believe that if the current global uncertainty persists, there is potential for further appreciation in the markets.