Whalesbook
Tehran's rejection of the US ceasefire plan, alongside its assertion of sovereign control over the Strait of Hormuz, hit precious metals markets hard. Gold prices dipped below the critical $4,500 per ounce level, hitting an intraday low of $4,413. Silver faced similar selling pressure, sliding below $70 per ounce to trade near $67.
Geopolitical Tensions Escalate
Ongoing US-Iran tensions are disrupting global energy markets. Brent crude, the global benchmark, climbed back to $100 per barrel, while West Texas Intermediate rose to $93, both on fears of supply disruptions. This jump in crude prices fuels inflationary concerns, which generally limits gains for precious metals.
Fed's Hawkish Stance Dampens Gold's Appeal
Gold's appeal as a safe-haven asset has weakened as major central banks adopt more hawkish monetary policies. Markets no longer expect interest rate cuts from the US Federal Reserve this year, a significant shift from early February forecasts of at least two cuts. Higher rates increase the opportunity cost of holding assets like gold that don't pay interest, limiting its upside.
Dollar Gains as Safe Haven Amid Escalation Fears
Adding to investor unease, the US is reportedly preparing to deploy thousands of troops in the Gulf region. This potential military build-up adds to fears of significant conflict escalation. Consequently, the US dollar is emerging as a primary safe-haven winner. The dollar index, after a brief decline, has returned to monthly record high levels. A stronger dollar makes gold and silver more expensive for buyers using other currencies, further hurting demand.
Domestic prices on MCX are expected to react to these global cues during the evening session, following a partial closure for Shree Ram Navami. Experts note that gold will likely remain volatile as long as geopolitical uncertainty and inflation persist, with a near-term range anticipated between ₹1,35,000–₹1,55,000.