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    Gold, silver price at 2-month high; safe haven buying on inflation

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    Gold, silver price at 2-month high; safe haven buying on inflation

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    In the last 24 hours, week on week, month on month, positive cues are coming from gold and silver.

    In the last 24 hours, week on week, month on month, positive cues are coming from gold and silver. At two month high and saw nearly 2 percent gain in gold and more than 3 percent up on silver in the overnight market; slightly flat queues but the markets believe that from hereon there could be further support continuing into this space.
    The reason is that safe-haven buying coming in due to higher inflation and the concerns in the international markets that the central banks are not doing enough to tackle that.
    Looking at inflation numbers, Britain’s annual inflation reading at the highest in last 30 years for the month of December. The Canadian inflation numbers also are the highest in 30 years. The US inflation is the highest in the last 40 years. So the high inflation is going to be one big reason that markets are long in gold and silver.
    The other reason is that after that huge run up recently, the dollar and the treasury yields softened a bit and that has been supportive.
    The markets also are looking at the geopolitical tensions. The US has announced additional USD 200 million of defense military aid to Ukraine. Russia and Ukraine have been warring on words as of now. There are some satellite images showing that Russia is preparing for an attack on Ukraine. Also, there are reports on how the UK is providing military assistance to Ukraine. So these are some of the reports that are supporting prices.
    Apart from that, there is a lot of physical buying that has come in for Asia as well. Remember India imported 1,000 tonne of gold in the previous year. There is a lot of buying in China that has come in ahead of the Lunar New Year and a lot of buying has been reported in the Middle East as well supporting prices.
    Watch the accompanying video of CNBC-TV18’s Manisha Gupta for more details.
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