Gold price in India hit a record high Rs 69, 640 per 10 grams on MCX on Wednesday tracking a sharp increase in international prices of the precious metal, driven by the high safe-haven demand amid escalating geopolitical tensions in Central Asia and the Russia-Ukraine war.

In the international market, spot gold was up 0.2 per cent at $2,283.76 per ounce in morning trade after touching an all-time high of $2,288.09 earlier in the session.

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Bullion has hit record highs consecutively since Thursday.

Gold prices gained more than 10.8 per cent so far this year and are set for a seventh consecutive daily rise as it is seen as a safe investment during times of political and economic uncertainty.

“Gold has continued its northward movement and scaled up to a new high today. Established as a safe haven asset, gold provides a meaningful hedge in an uncertain economic environment laden with geopolitical tensions. Subject to international weather shift, gold as an asset class is expected to remain elevated on the back of a bullish trend,” said Colin Shah, founder MD of Kama Jewelry.

The upward mobility seen in gold’s performance can also be attributed to the absence of any major adversities from the recently announced core price index in the US last week, keeping the estimation on the US Fed’s rate cut announcement on track, he added.

Central banks, led by China have also been buying gold in large quantities which has contributed to the price rise.

The demand for gold in the domestic market is fuelled by the need for precious metal in marriages as it is gifted to brides and grooms in large quantities as jewellery.

However, jewellers are of the view that the soaring gold prices may dampen this demand. This is also reflected in the declining imports of the precious metal, according to them.

“Gold prices have moved steadily higher over the last six months as expectations of a dovish Fed policy have been gaining ground. The fall in interest rates is a positive for gold prices. The gold prices breaking key long-term resistance levels indicate there may be strong momentum which may continue over the near to medium term,” said Joseph Thomas, Head of Research at Emkay Wealth Management.