Gold prices fell by nearly 1 per cent to ₹1.50 lakh per 10 grams in futures trade on Monday, tracking weak global trends amid a firm US dollar and elevated crude oil rates.
On the Multi Commodity Exchange (MCX), the yellow metal for June delivery declined ₹1,149, or 0.76 per cent, to ₹1,50,203 per 10 grams in a business turnover of 9,510 lots.
During the previous week, gold had depreciated by ₹1,347, or nearly 1 per cent, to close at ₹1.51 lakh per 10 grams.
“Gold prices have remained largely range-bound with slight pressure seen due to persistent inflation concerns and expectations of higher interest rates, although geopolitical tensions continue to provide downside support,” Gaurav Garg, Research Analyst at Lemonn Markets Desk, said.
In the international markets, Comex gold futures for the June contract declined USD 58.7, or 1.26 per cent, to USD 4,585.8 per ounce in New York.
“Gold prices trade lower, continuing last week’s fall, hovering near one-month lows, as strength in the dollar and surging oil prices continued to weigh on sentiment,” Manav Modi, Commodities Analyst, Motilal Oswal Financial Services Ltd, said.
Rising crude oil prices, driven by ongoing US-Iran tensions and supply disruptions through the Strait of Hormuz, have heightened concerns about energy-led inflation, prompting a wave of hawkish signals from major global central banks, he added.
The US Federal Reserve has kept interest rates unchanged but flagged rising inflation risks, while Fed Chair Jerome Powell cautioned about higher inflation risks; however, he also expressed optimism about resilient growth.
Meanwhile, the European Central Bank, the Bank of England, and the Bank of Japan have also hinted at potential rate hikes, reinforcing the higher-for-longer narrative that weighs on assets such as gold.
On the geopolitical front, uncertainty persisted as US President Donald Trump reviewed potential military actions even as Iran submitted a revised peace proposal, offering some hope for de-escalation.
However, Trump expressed dissatisfaction with the proposal, keeping markets on edge, while Iran reiterated its control over the Strait of Hormuz, sustaining risks to global oil supply.
Investors will closely monitor the PMI data from major economies and the US jobs indicators for further cues on the monetary policy cycle and the trajectory for bullion prices, Modi of MOFSL said.