New Delhi: Geo-political tensions between the US and Iran on top of a slowing global economy have forced the investors to bet on safer assets, driving the gold prices to over 6-year high.
Demand for the precious metal gained momentum last week when the US Federal Reserve signalled it would cut interest rate in the future Federal Open Market Committee (FOMC) meets in 2019.
The US Fed's dovish stance weakened the dollar, making the gold cheaper.
"Gold continued its unabated rally, with prices reaching a six-year high as a weaker dollar on rate cuts hopes, lingering trade worries and simmering US-Iran tensions boosted the appeal of the precious metal as a safe haven asset," a report by Kedia Advisors said on Tuesday.
At multi-commodity exchange (MCX) (19.48 IST), gold contract expiry in August was trading Rs 370 or 1.07 per cent higher at Rs 3,4811 per 10 gram after touching an intra-day high of Rs 34,893.
Gold was trading a little over $1,430 per troy ounce in the futures market.
Also read: Gold prices surge Rs 34,500, close to six-year high
"Gold has emerged as clear winner scaling to multi-year highs, amid a flurry of geopolitical events and the likelihood of feeble global economy," said Jagannadham Thunuguntla, Sr. VP and Head of Research (Wealth), Centrum Broking Limited.
The precious metal is extending gains for the sixth day and is up 10 per cent so far in June over mounting US-Iran geopolitical risks, analysts noted.
