Gold slips 17 pc from record high despite war tensions

Gold prices in India remain nearly 17 per cent below their record high despite rising geopolitical tensions linked to the Middle East conflict. Analysts attribute the muted rally to a stronger US dollar, rising crude prices and expectations of continued hawkish US interest rate policy.

New Delhi: Even as geopolitical tensions intensify with the Middle East conflict entering its fifth week, gold prices in India remain nearly 17 per cent below their record peak.

Gold prices ended the week on a positive note, but the broader trend reflects pressure on bullion.

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The COMEX gold price settled at $4,679.70 per ounce, while on the domestic front, MCX gold closed at Rs 1,49,650 per 10 grams.

This places gold prices in India around Rs 31,000 lower than their all-time high of Rs 1,80,779 per 10 grams.

Market experts said that the ongoing geopolitical uncertainty initially boosted gold’s appeal as a safe-haven asset.

However, sentiment shifted after US President Donald Trump’s address dashed hopes of a ceasefire in the US-Iran conflict.

“Markets now shift focus to key US data including Non-Farm Payrolls, ADP employment, and unemployment rate, which could drive sharp volatility,” an analyst stated.

From a technical perspective, experts said that the support is seen near Rs 148000, while resistance is placed around Rs 155000.

The escalation triggered a sharp rally in crude oil prices, which in turn strengthened the US dollar and reignited inflation concerns globally.

A stronger dollar typically makes gold more expensive for holders of other currencies, thereby capping its upside.

Analysts noted that this dynamic has played a key role in preventing gold from testing its previous highs despite heightened geopolitical risks.

Adding to the pressure, recent US economic data has pointed to resilience in the world’s largest economy.

Better-than-expected nonfarm payroll numbers indicated that the labour market remains strong, which could ease immediate concerns around a slowdown.

This has strengthened expectations that the US Federal Reserve may continue to maintain a hawkish stance on interest rates.

Higher interest rates reduce the appeal of non-yielding assets like gold, further limiting its upward momentum.

Despite these headwinds, gold managed to post a weekly gain of around 2.20 per cent. Analysts believed that the trajectory of gold prices will now depend on how the geopolitical situation evolves and whether inflationary pressures persist in the coming weeks.

“Overall, gold is expected to remain highly volatile with event-driven moves in the near term,” a market expert mentioned.