Gold Futures Slide 1 Pc to ₹1.42 Lakh/10g on Renewed Middle East Tensions

Gold futures fell 1% to ₹1.42 lakh per 10 grams on Monday as renewed military exchanges between the US and Iran lifted oil prices, strengthened the dollar and dented the demand for the precious metal.

On the Multi Commodity Exchange (MCX), the yellow metal for August delivery declined by ₹1,413, or 0.98%, to ₹1,42,065 per 10 grams in a business turnover of 9,962 lots.

Last week, MCX gold futures fell ₹3,900, or 2.65%, to close at ₹1.43 lakh per 10 grams.

"Gold prices remained under pressure as renewed military tensions between the US and Iran boosted oil prices, reviving concerns over energy-driven inflation and reinforcing expectations that the Federal Reserve could keep interest rates higher for longer," said Manav Modi, Commodities Analyst at Motilal Oswal Financial Services Ltd.

He said the escalation followed fresh US strikes on Iranian targets after attacks on commercial vessels in the Strait of Hormuz, while uncertainty over the status of ceasefire negotiations and temporary closure of the waterway continued to support crude oil prices.

According to Modi, rising energy costs have renewed fears of another inflation shock, strengthening the US dollar and Treasury bond yields.

In the international markets, Comex gold futures for August contract slipped USD 52.15, or 1.3%, to USD 4,061.55 per ounce in New York.

"Comex gold prices slipped below USD 4,100 per ounce in overseas trade as the metal remained under pressure as renewed geopolitical tensions between the US and Iran strengthened the US dollar and dampened investor sentiment," Pinky Yadav, Commodity Fundamental Analyst at Choice Broking, said.

"Investors are awaiting this week's US inflation data, including the Consumer Price Index and Producer Price Index along with Federal Reserve Chair Kevin Warsh's congressional testimony, both expected to provide fresh signals on the future direction of interest-rate outlook and trajectory for bullion prices," she added.