Profit-Booking Cools Gold Rally Amid Geopolitical Tensions; Silver Surges 0.6% on MCX

Gold futures had a bumpy ride on June 17, seesawing between gains and losses. The August contract on the Multi Commodity Exchange dipped as much as 0.4% to hit an intraday low of ₹98,810, after briefly shining 0.1% above its previous close earlier in the day. The yellow metal, it seems, couldn’t quite decide which way to glitter.

This recent correction comes after a steep surge in gold prices as investors looked to book some profits after recent gains, even as tensions in the Middle East persist. Some experts believe that the current geopolitical risk is already priced in, and bullion prices can now further rise only after a significant escalation in tensions. The recent correction indicates a stabilisation of speculative buying and a move towards equilibrium pricing.

Besides the updates on tensions in the Middle East, outcome of the US Federal Reserve's meeting on Wednesday night will also be a key monitorable. A sudden spike in geopolitical tensions had given a boost to gold prices last week, injecting fresh momentum into a rally already fueled by concerns over global economic growth amid President Donald Trump’s tariff policies.

Nirmal Bang Commodity Research said in a report that gold prices will likely correct hereon. “One can sell at 99600 with a stop loss of 100000 for the target at 99100-98700,” it further added.

The depreciation of the rupee against the dollar, which in turn increases the import prices for gold, has also increased cost pressures.On COMEX, gold futures fell up to 0.7% to its intraday low level of $3,392.17.

So far, the yellow metal has gained over 3% in June. If gold is able to end above $3,289 per ounce in June, it would complete a six-month winning streak, last witnessed 23 years ago, Axis Securities said in a report.

While gold prices softened, silver on the other hand, continued its upswing. The July contract of silver futures was close to record highs. It rose as much as 0.6% on the MCX to its intraday high level of ₹1,07,234 per kilogram. The divergence of gold and silver prices indicates divergent behavior of investors between these precious metals, with silver still drawing interest. Though the grey metal began the session at a discount, it has been climbing steadily since.