Gold Prices Fluctuate Amid US-Iran Tensions, Inflation Fears | Cliff News
Gold sees weekly gains, but faces headwinds from dollar strength & oil prices.
Top Summary
- What happened: Gold prices saw a 2.20% weekly gain despite the ongoing US-Iran war, closing at ₹1,49,650 per 10 gm in India.
- Why it matters: Geopolitical tensions and inflation concerns are impacting gold's safe-haven status, with the US dollar gaining preference.
- What changes for people: Investors face volatility and uncertainty, requiring careful monitoring of oil prices and dollar strength.
- Who is affected: Gold investors, traders, and consumers in India and globally are affected by the fluctuating prices.
US-Iran War Impact on Gold
Despite the fifth week of the US-Iran war, gold managed a weekly gain. COMEX gold finished at $4,679.70/oz. The MCX gold rate ended at ₹1,49,650 per 10 gm.
Gold prices in India are around ₹31,000, 17% below the record high of ₹1,80,779 per 10 gm.
Geopolitical Tensions and Safe-Haven Dynamics
Sugandha Sachdeva, Founder of SS WealthStreet, noted that gold's upside was capped despite crude oil surging over 10%. This intensified inflation concerns and altered safe-haven dynamics.
“Despite ongoing geopolitical tensions, gold has corrected by nearly 7% since the onset of the Iran conflict on 28th February, highlighting a shift in investor preference towards the US dollar as the primary safe-haven asset,”
said Sachdeva.
Impact of US Economic Data
Strong US payroll data is expected to cool inflation fears and demonstrate the resilience of the US economy. This supports the Federal Reserve maintaining a hawkish bias.
“This strengthens the case for the Federal Reserve to maintain a hawkish bias, supporting the dollar and limiting upside in bullion. Additionally, persistent ETF outflows throughout March, with redemptions significantly exceeding inflows, reflect weakening investment demand for gold,”
Sachdeva added.
Expert Outlook on Gold Prices
Ponmudi R, CEO of Enrich Money, believes global markets are in a wait-and-watch mode. Sentiment is balanced between caution and stability.
“Post-Trump’s address to the nation, markets are showing a measured reaction rather than panic, indicating that risk sentiment remains controlled for now. This has capped aggressive safe-haven flows into gold, keeping rallies restricted,”
Ponmudi R stated.
Trading Strategies for Gold
Ponmudi R highlighted key levels for COMEX gold. A breakout above $4,800 could extend toward $4,850, with potential towards $4,900. A break below $4,600 may accelerate selling toward $4,550–$4,500, potentially dragging prices to $4,400.
Sugandha Sachdeva notes resistance at ₹1,57,600 to ₹1,58,800 per 10 gm domestically and $4,800–$4,880 per ounce internationally. Support is seen at $4,400 and ₹1,44,000 to ₹1,45,000 per 10 gm.
Key Factors Influencing Gold Prices
Sugandha maintains that gold remains caught between geopolitical uncertainty and macro headwinds. Price action is dictated by crude oil trends and dollar strength.
As long as oil prices remain elevated and rate-cut expectations stay delayed, bullion is likely to witness volatility rather than a sustained rally.
What to Watch Next
Monitor US economic data releases, particularly inflation figures and Federal Reserve announcements, for clues on interest rate policy. The evolution of the US-Iran situation and its impact on oil prices will also be crucial for gold's direction.