Gold prices started the week on a negative note, declining by ₹2,225 to ₹1.56 lakh per 10 grams in the futures trade on Monday amid a bearish sentiment in the overseas markets and a strong US dollar.
On the Multi Commodity Exchange, gold futures for April delivery depreciated by ₹2,225, or 1.4%, to ₹1,56,241 per 10 grams in a business turnover of 7,881 lots.
"Gold prices declined as rising energy prices strengthened the US dollar and heightened concerns that the Federal Reserve may delay interest rate cuts," Manav Modi, Analyst - Commodities, Motilal Oswal Financial Services Ltd, said.
2 March 2026
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Traders had earlier expected a rate cut at the March meeting, but such expectations have largely faded, while the probability of cuts later this year has dropped to 80%.
Market positioning also reflected increasing caution, with holdings in gold-backed exchange-traded funds declining by nearly 31 tonnes so far this month as participants trimmed exposure amid rising uncertainty, Modi said.
In the international market, gold futures for the April contract slipped $54.31, or 1.07%, to $5,007.39 per ounce on the Comex.
"Gold held near $5,000 per ounce after falling for two straight weeks, as oil remained volatile after the US attacked Iran's main oil-export hub of Kharg Island over the weekend, heightening global supply risks," Jigar Trivedi, Senior Research Analyst at IndusInd Securities, said.
Meanwhile, the US-Israeli war on Iran has now entered its third week with no clear resolution in sight, rattling financial markets.
"Higher energy prices and mounting inflationary pressures have lowered expectations that the US Federal Reserve and other major central banks will cut interest rates, posing a headwind for non-yielding precious metals," Trivedi said.
The Fed is widely expected to hold its policy rate steady this week, while central banks in the Eurozone, the UK, Japan, Switzerland, Australia, Canada, China, Brazil, and Russia are also set to decide on monetary policy, he added.
