Just a few days ago, and creating fresh excitement among investors. But on Monday, the yellow metal appeared to pause for breath. After the recent sharp rally, gold prices on the Multi Commodity Exchange (MCX) moved up only slightly, reflecting a cautious mood in the market.
Today, at around 11.30 am, MCX was trading at Rs 1,58,686 per 10 grams, up by just Rs 139. The modest rise comes after a period of strong gains, suggesting that bullion may be entering a phase of consolidation.
The slight movement in gold prices comes as rising crude oil prices have added fresh concerns around inflation. Investors are now worried that central banks, especially the US Federal Reserve, may keep interest rates high for longer or even consider another rate hike.
The latest trigger came after a drone strike reportedly caused a fire at a nuclear power facility in the United Arab Emirates, worsening tensions in West Asia. The development pushed crude oil prices to their highest level in nearly two weeks, adding to fears of supply disruptions.
At the same time, uncertainty around the Strait of Hormuz, one of the world’s busiest oil routes, continues to keep markets on edge. US President Donald Trump on Sunday, i.e, on May 17, as tensions remain unresolved, and the critical trade route stays effectively shut.
Gold is usually seen as a safe investment during uncertain times and is often bought as protection against inflation. However, it behaves differently when interest rates rise.
Unlike fixed deposits or bonds, gold does not generate regular income. This means when interest rates remain high, investors often shift money towards interest-paying assets.
In other words, higher rates can reduce gold’s attractiveness, even if inflation concerns continue.
According to Dr Ravi Singh, Chief Research Officer (Research) at Master Capital Services Limited, MCX gold is currently witnessing a technical pullback after the strong rally seen recently.
“MCX Gold futures witnessed a technical pullback to settle at Rs 1,58,547, down 2.12%, as the domestic market entered a phase of consolidation following the recent duty-led rally,” Singh said.
However, he believes the larger trend still remains positive.
“Despite the short-term decline, the broader trend structure remains constructive with prices continuing to maintain a ‘higher high, higher low’ formation on the daily charts,” he added.
Singh explained that immediate support for gold is now around Rs 1,57,100, while a stronger support level is placed near Rs 1,56,000.
“On the upside, resistance is seen at Rs 1,61,000, and a decisive close above this level could revive fresh bullish momentum in the near term,” he said.
International gold prices have slipped to a one-month low, mainly due to a stronger US dollar and higher US Treasury yields.
Markets are also reviewing the outcome of the recent US-China talks. While the discussions helped maintain diplomatic stability, there was no major progress on trade or economic concerns.
At the same time, easing fears of an immediate escalation in Iran-Israel tensions have slightly reduced demand for safe-haven assets like gold.
Dr Ravi Singh pointed out that despite weaker global trends, Indian gold prices are still holding firm.
“Despite weaker international cues, MCX gold continues to trade at a firm premium due to India’s 15% import duty and tighter domestic supply conditions, which are helping prices maintain resilience even as global bullion navigates mixed macroeconomic signals,” he said.
Experts suggest investors should after the recent sharp rally. Gold may remain volatile in the coming days because of global tensions, crude oil price movements and uncertainty around US interest rates.
For long-term investors, experts believe buying in small amounts over time may be a better strategy than making a lump sum investment at current levels.
Short-term traders, meanwhile, may want to closely watch the Rs 1,57,100 support level and Rs 1,61,000 resistance mark highlighted by analysts before taking fresh positions.
For now, gold still has support from global uncertainty, but after its recent sprint, the market may be taking a brief pause before deciding its next move.