Gold prices climbed to a multi month high on Monday as investors shifted their money into safe haven assets amid rising geopolitical tensions and uncertainty in global financial markets.
Market analysts said demand for gold increased as concerns grew over escalating conflicts in the Middle East and fears of a wider economic slowdown. When risks rise in equity and currency markets, investors traditionally turn to gold as a store of value.
The surge in gold prices was supported by weaker stock markets across Asia and Europe, while bond yields also showed signs of softening. Traders cited increased buying from institutional investors and central banks as another factor pushing prices upward.
A softer US dollar further boosted gold’s appeal, making the precious metal cheaper for buyers using other currencies. Analysts noted that expectations of interest rate cuts by the United States Federal Reserve later this year have also strengthened demand, as lower rates reduce the opportunity cost of holding gold.
In India, retail demand remained steady despite higher prices, with jewellers reporting continued interest ahead of the wedding season. Importers said volatility in global markets has led many buyers to prefer gold over riskier investments.
Economists believe gold prices may remain elevated if global tensions persist and inflation worries return. However, they cautioned that sudden improvements in diplomatic relations or stronger economic data could trigger short term corrections.
