Gold Surges 1.42% on Geopolitical Fears, Weak Dollar

Gold prices surged 1.42% on January 12, 2026, reaching ₹141,120 per 10 grams for 24-karat gold. This significant increase reflects a ₹1,980 gain from the previous day, with 22-karat gold also rising by ₹1,815 to ₹129,360 per 10 grams. The trend shows a uniform 1.42% appreciation across different gold purities.

Sharp Rise Driven by Global Instability

The upward movement in gold prices is intrinsically linked to global economic and geopolitical factors. A weakening US dollar makes gold, priced in dollars, more attractive to holders of other currencies, thereby stimulating demand. This inherent characteristic of precious metals as a hedge against currency depreciation is currently playing out.

Economic Headwinds Fuel Safe-Haven Demand

Escalating international tensions are bolstering gold's appeal as a safe-haven asset. Events such as unrest in Iran, the ongoing crisis in Venezuela, and geopolitical maneuvering in regions like Greenland are heightening investor anxiety. In such uncertain times, investors typically rotate towards assets perceived as stable, with gold often being the primary choice.

Concerns surrounding the US Federal Reserve's independence and potential pressure for interest rate cuts are further amplifying gold's momentum. Historically, gold tends to perform robustly in an environment of falling or low interest rates, as the opportunity cost of holding the non-yielding asset diminishes.

Outlook Remains Bullish for Gold

Analysts foresee gold prices maintaining their elevated trajectory in the long term. Lingering doubts about the Federal Reserve's autonomy and increasing bets on upcoming rate cuts, coupled with disappointing US employment data, are expected to sustain the positive sentiment. This confluence of factors suggests a persistently bullish outlook for the yellow metal.