Gold futures decline 0.15%, settling at Rs 1,51,119 on MCX, while silver falls 0.08%

Gold Prices Fluctuate Amid Ongoing Geopolitical Tension

Gold traded marginally lower on May 4, as investors closely track the ongoing geopolitical tension in the West Asian conflict amid the ceasefire, which has kept the market volatile in the near term.

The international spot gold traded 0.83 percent lower to Rs $4,606 per ounce on Comex, while silver traded 0.90 percent lower from the previous close. The domestic June futures gold contract on MCX traded 0.15 percent lower at Rs 1,51,119 per 10 grams from its previous close, while the silver futures contract for July inched 0.08 percent lower to Rs 2,50,730 per kilogram (09:05 IST).

Gold prices vary as per purity. Here's a comparison of the price of 10 grams of 24-karat, 22-karat, and 18-karat gold:

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The real market trend will be guided by the crude oil prices, which, in turn, will be decided by the news and happenings in West Asia. President Trump's declaration that the U.S. will help and guide ships through the Strait of Hormuz has brought Brent crude down to around $108. Also, there is a latest proposal from Iran to the US delivered through Pakistan.

On Friday (Apr. 30), global sentiment deteriorated sharply amid escalating US–Iran tensions and disruptions to major maritime shipping routes. Brent crude crossed the $120-per-barrel mark for the first time in four years, intensifying inflation concerns and pressuring global risk assets.

The Augmont Bullion report (Apr. 30) noted that gold traded near $4,550, at one-month lows, amid rising energy costs that fueled inflation concerns and reinforced expectations of further central bank tightening. The World Gold Council's latest Gold Demand Trends report notes that Middle East war uncertainty and unresolved Fed direction collectively support a structurally higher gold price outlook.

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According to a commodity analyst, while the US Federal Reserve and the outlook for US monetary policy remain focal points for the gold market, external factors – the Iran war and its impact on energy prices – appear to be the more relevant short-term drivers. Carsten Menke, Head Next Generation Research, Julius Baer, noted that short-term price swings are driven by speculative traders in the paper market rather than safe-haven seekers in the physical market.