At the end of January, attention turned to the US Federal Reserve’s policy and the Union Budget set to be released on February 1, both of which may impact market volatility and currency fluctuations, according to analysts. In the midst of this, gold prices have been experiencing unprecedented highs, although there was a notable sell-off following the President’s conciliatory remarks regarding Greenland, which alleviated some geopolitical tensions.
On the Comex exchange, gold prices surged past the $4,900 mark, reaching a record high of $4,970 per ounce, before settling at $4,954 per ounce, reflecting a 0.84% increase from the previous close. In the Indian market, the Multi Commodity Exchange (MCX) indicated that the price of 24-carat gold futures closed at Rs 1,56,540 per 10 grams, registering a slight 0.13% gain from the previous session, and peaking at Rs 1,58,475 on January 21, 2025.
However, on Thursday, gold faced some pressure as geopolitical risk factors prompted partial profit-taking in Indian markets. This was spurred by the President’s indication that a favorable trade deal with India is on the horizon, marking a shift in diplomatic tone.
Gold’s stellar rally has encountered a diplomatic obstacle, as the transition from aggressive threats to a more cooperative stance regarding Greenland has effectively diminished the immediate geopolitical risk premium. Consequently, investors are liquidating their safe-haven assets and returning to riskier investments as tensions related to trade in the Arctic region begin to ease.
