Gold prices hit 13-month high; diamonds in the rough

Kolkata: Gold crossed ₹51,500 per 10 gm on Thursday, the highest in 13 months, as Russia declared war on Ukraine. Those planning weddings will be forced to fork out more on gold jewellery not only due to rising prices of the yellow metal, but also on account of an upside in diamond prices that are up 15-20%.

The wedding season will continue till June. There has been a shortage in supply of rough diamond from the mines and the situation may worsen if supply from Russia's Alrosa, the second-biggest miner in the world, gets affected due to the rising geopolitical tensions. Russia is also the third-largest producer of gold with a production of 310 tonnes annually.

Gold prices rallied on Thursday. MCX Gold April futures surged 2.40% to close at ₹51,590 per 10 grams after Russia President Vladimir Putin authorised military operation in Ukraine. The yellow metal rose on safe-haven buying along with the dollar on geopolitical risks fearing more sanctions on Russia and possible disruption of commodity supplies.

MCX Gold prices have got additional support from sharp rupee depreciation. Prices are unlikely to fall immediately, said analysts.