Inflationary fears triggered a rush for safe haven investments during the ongoing market volatility that pushed up the global gold price to $2,000 per ounce on Monday.
Accordingly, the fears of supply shortages due to the Russian-Ukrainian conflict along with robust demand has kept prices higher.
Besides, sanctions on Russia, which is a major producer of Gold, is expected to reduce the supply.
Last week, MCX gold prices increased sharply by 4.66 per cent to Rs 52,559 levels.
Besides, 'Spot Gold' prices increased by 4.30 per cent to $1,970.35 per ounce.
Notably, gold prices have increased by more than $40, accelerating a well-defined upward trend that began in the first week of March.
"Gold has risen above $2,000 an ounce on increased demand for safe-haven assets as investors assess the geopolitical and economic consequences of Russia's invasion of Ukraine," said Kshitij Purohit, Lead of Commodities and Currencies CapitalVia Global Research.
"There are numerous reasons to believe that gold will rise, not the least of which are geopolitical concerns. The crisis in Ukraine continues to produce a lot of anxiety, and as a result, people have been flocking to safety assets."
According to Tapan Patel, Senior Analyst (Commodities), HDFC Securities: "The yellow metal rallied on geopolitical risk and inflation worries as Western world is mulling for harsher sanctions on Russia, including oil import ban."
"We expect gold prices to trade up for the day with 'COMEX' Spot gold support at $1970 and resistance at $2,050 per ounce. MCX Gold April futures resistance at Rs 54,000 and support at Rs 52,800 per 10 gram."
In addition, IIFL Securities VP, Research, Anuj Gupta said: "Geopolitical tension between Russia and Ukraine plays a supportive role for gold prices, however this environment is negative for global equity markets."
"In spot gold may test $2,050 and Silver $27 levels very soon."