After surging to Rs 51543 on Thursday's closing, Gold MCX April futures on Friday opened at Rs 51180 per 10-gram on Multi Commodity Exchange. The yellow metal dropped by Rs 516 per 10 gram to Rs 51027 around 1.30 pm.     

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Gold has been on the rise since the Ukraine-Russia unfolded on Thursday. The precious yellow metal surged 2%, its highest in more than one year, on Thursday on safe haven tag amid the war between Russia and Ukraine.    

Gold rose on Friday, stabilising after big swings in the previous session when prices jumped as much as 3% before closing lower, as investors reassessed the fallout of the Ukraine crisis and fresh sanctions imposed by the West against Russia, said a Reuters report.   

Spot gold rose 0.7% to $1,916.10 per ounce after hitting its highest since September 2020 at $1,973.96 on Thursday.   

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Gold remained volatile on Friday as investors seems to be assessing risks and rewards as a result of the Ukraine invasion and the implications of Western sanctions on Russia.    

Ukraine war impact on Gold   

Speaking of Ukraine war impact on the precious metal, Chirag Mehta - Senior Fund Manager - Alternative Investments, Quantum AMC, says financial markets will continue to remain vulnerable to geopolitical developments in the immediate future, while Gold, a much-chased asset class in such times, is set to benefit as risk-averse investors would increase exposure to it amid pullbacks in risk assets.    

"Once the uncertainty on these front eases, gold prices can be expected to sober down," he adds    

In the event of this conflict getting extended or escalated, we are looking at more money printing to fund military actions, higher energy prices as supplies from major exporter Russia get hit and economic sanctions on Russia as the NATO fights back, says Chirag Mehta.   

"All these will fan the fire of already high inflation; take a toll on slowing economic growth and spur market volatility and risk aversion. This environment will be supportive of gold prices but will eventually clash with the Fed’s tightening cycle, which is expected to keep gold prices in check," says the commodity expert.    

Do not mistake gold for tactical play 

He warns investors of not mistaking gold for tactical play. "One should stick to the fundamentals and allocate 10-15% of their portfolio to this strategic asset class that has time and again played a return-enhancing and risk-reducing role in investor portfolios in times of financial, geopolitical or other crisis. Those already invested should thus stay put. New investors should avoid lumpsum investment at current levels," adds Mehta.   

Hedge against inflation 

Manoj Kumar Jain, Director, Head-Commodity & Currency Research, Prithvifinmart Commodity Research, was of the view that as higher global energy prices continue to push global inflation higher and, they support precious metal prices as a hedge against inflation. "We expect the yellow metal to continue to show strength in upcoming sessions and gold prices could test $1935 per troy ounce.” Jain Said on Thursday 

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)