Whalesbook
Analysts forecast continued volatility, with gold prices expected to react solely to headlines concerning negotiations over the next 24 to 48 hours. The rejection of the Trump administration’s ceasefire plan by Tehran, coupled with its insistence on sovereign control over the Strait of Hormuz, sent shockwaves through precious metals markets. 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 Fallout Intensifies
The ongoing tensions between the US and Iran are increasingly 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 surge in crude prices is heightening inflationary concerns, which typically limits upside potential for precious metals.
Federal Reserve's Hawkish Stance Deters Gold
The safe-haven appeal of gold has been significantly eroded as major central banks adopt a more hawkish monetary policy. Markets now anticipate no interest rate cuts from the US Federal Reserve this year, a stark contrast to early February when at least two cuts were expected. Higher interest rates increase the opportunity cost of holding non-yielding assets like gold, thereby capping its gains.
Dollar Strengthens as Safe Haven
Further escalating investor sentiment concerns, 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 robust dollar makes gold and silver more expensive for holders of other currencies, further denting 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 as long as geopolitical uncertainty and inflation persist, gold is likely to remain volatile, with a near-term range anticipated between ₹1,35,000–₹1,55,000.