Gold Falls to Rs 1.62 Lakh per 10 Grams Amid Uncertainties Over West Asia Peace Deal

Gold Prices Decline in National Capital Amid US-Iran Tensions

Gold prices in the national capital witnessed a decline of Rs 2,800 to Rs 1,62,400 per 10 grams on Tuesday, as military tensions between Washington and Tehran drove investors towards the US dollar. The All India Sarafa Association reported that the yellow metal of 99.9 per cent purity depreciated by Rs 2,800 from its previous settlement of Rs 1,65,200 per 10 grams.

The decline in gold prices was attributed to the ongoing uncertainty surrounding US-Iran negotiations, which kept investors cautious. Market participants largely stayed on the sidelines, avoiding aggressive positions and waiting for clearer signals on the geopolitical front. The lack of clarity in diplomatic efforts has left precious metals in a state of consolidation, with the market closely monitoring movement in crude oil, the US dollar, and Treasury yields for direction.

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In the international markets, spot gold fell nearly 1 per cent to USD 4,534.69 per ounce, while silver slipped a little over 2 per cent to USD 76.49 per ounce. The decline in gold prices was also influenced by reports of fresh US military strikes on southern Iran, despite ongoing negotiations in Qatar aimed at preserving a seven-week-old ceasefire. The United States Central Command stated that the operations were defensive in nature and did not signal an end to the ceasefire arrangement.

Iran's Islamic Revolutionary Guard Corps claimed that it had shot down a US drone that entered Iranian airspace, adding another layer of uncertainty to already fragile negotiations. The renewed tensions pushed crude oil prices higher, reviving fears that elevated energy costs could sustain inflationary pressures globally and force central banks to maintain tighter monetary policy for longer.

Analysts believe that any progress toward a potential agreement could alleviate tensions in the energy market and address inflation concerns, creating a more favourable environment for precious metals. Conversely, any setbacks in negotiations could reignite fears of inflation due to rising energy prices, which would reinforce expectations for tighter monetary policy and put additional pressure on gold and silver prices.

Investors are now awaiting the upcoming US Core Personal Consumption Expenditures (PCE) inflation and GDP numbers, which could significantly influence the Federal Reserve's expectations and bullion movement in the near term.

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