Gold prices retreated by ₹1,107 to ₹1.57 lakh per 10 grams in futures trade on Tuesday as renewed US military strikes against Iran triggered volatility, strengthened the US dollar and prompted traders to book profits.
On the Multi-Commodity Exchange, the yellow metal for June delivery rose by ₹1,107, or 0.7 per cent, to ₹1,57,974 per 10 grams in a business turnover of 4,725 lots.
Similarly, the August contract for gold also traded lower, declining by ₹1,061, or 0.65 per cent, to ₹1,61,320 per 10 grams in 4,810 lots on the MCX.
Analysts said the gold prices remained volatile as investors reacted to escalating tensions in West Asia and fluctuating crude oil prices.
“Gold prices experienced some volatility in the domestic futures market on Tuesday,” Gaurav Garg, Research Analyst at Lemonn Markets Desk, said.
Optimism around possible US-Iran peace negotiations had initially supported sentiment before renewed uncertainty sparked fresh selling, he added.
In the international markets, Comex gold futures for August delivery went up marginally to $4,562.15 per ounce in New York.
Gold prices turned volatile after the US military conducted fresh strikes on Iranian targets, which revived fears of a prolonged conflict in West Asia, Manav Modi, Commodities Analyst, Motilal Oswal Financial Services Ltd, said.
The renewed escalation pushed crude oil prices higher after a week of declines, reigniting concerns over energy-driven inflation and keeping markets cautious, he added.
“A rebound in oil prices also supported the US dollar, which remained relatively firm as investors continued to view the greenback as a safer asset amid geopolitical uncertainty,” Modi said.
US President Donald Trump acknowledged the ongoing diplomatic engagement with Tehran, but cautioned that military action could resume if talks collapse.
Renisha Chainani, Head of Research at Augmont, said gold is down nearly 15 per cent in the overseas markets since the conflict began, as energy-driven inflation fears reinforced central bank tightening expectations.
However, the week’s sharp oil price decline has partially eased inflation concerns and tempered rate hike bets, she added.
Market participants are awaiting the upcoming US GDP and inflation-related numbers later this week for fresh cues on the Federal Reserve’s interest rate cycle and its impact on bullion prices.