Even as tensions escalate in the Middle East conflict, gold prices in India are currently nearly 17% lower than their peak. The week closed with a positive note for gold prices, but overall, there is pressure on bullion. The COMEX gold price settled at $4,679.70 per ounce, while domestically, MCX gold closed at Rs 1,49,650 per 10 grams.
This places gold prices in India significantly below their all-time high of Rs 1,80,779 per 10 grams. Initially, geopolitical uncertainty boosted gold’s appeal as a safe-haven asset, but sentiment shifted after US President Donald Trump’s address regarding the US-Iran conflict. Market experts are now focusing on key US data like Non-Farm Payrolls, ADP employment, and unemployment rate, which could lead to sharp volatility.
From a technical perspective, experts note that support is near Rs 148,000, with resistance around Rs 155,000. The recent escalation has led to a surge in crude oil prices, strengthening the US dollar and reigniting global inflation concerns. A stronger dollar typically makes gold more expensive for holders of other currencies, limiting its upside.
Analysts highlight that this scenario has played a significant role in preventing gold from reaching its previous highs despite heightened geopolitical risks. Recent US economic data showing strength in the labor market and better-than-expected nonfarm payroll numbers suggest resilience in the economy. This could ease immediate concerns about a slowdown and possibly lead the US Federal Reserve to maintain a hawkish stance on interest rates.
Higher interest rates reduce the appeal of non-yielding assets like gold, further constraining its upward momentum. Despite these challenges, gold managed to post a weekly gain of around 2.20%. Analysts anticipate that the trajectory of gold prices will 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 movements in the near term.
