Gold Price Plunges ₹18,000 from Record High Amid US-Iran Tensions Ease

Gold Prices Rebound Amid Easing Geopolitical Tensions

Key Highlights

• Gold prices on the Multi Commodity Exchange (MCX) rose to an intraday high of ₹1,61,675 per 10 grams, ₹19,000 below the lifetime high of ₹1,80,779.
• COMEX gold ended at $5,158.70 per ounce, about $468 below its record peak of $5,626.80 per ounce.
• The rally came after comments from US President Donald Trump suggested that the conflict with Iran could end sooner than expected.

Market Analysis

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The rebound in gold prices can be attributed to easing geopolitical tensions in the Middle East and a weaker US dollar. A weaker dollar makes gold cheaper for investors holding other currencies, while lower oil prices reduce fears of a war-driven surge in inflation. Reduced inflation risks can also lessen the likelihood of central banks raising interest rates, a positive factor for non-yielding assets such as gold.

Long-term Outlook

Market experts believe that while gold remains fundamentally strong, the near-term outlook could involve consolidation rather than an immediate breakout to new highs. Renisha Chainani, Head of Research at Augmont, expects prices to remain supported but move within a range before attempting another leg higher. She noted that the broader long-term drivers for gold remain intact, including high global debt levels, expectations of monetary easing, and continued geopolitical risks.

Near-term Projections

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• Gold prices are expected to move towards $5,250 (~ ₹1,65,000) and $5,300 (~ ₹1,67,000) in the near term.
• Strong support is seen around the $5,000 (~ ₹1,58,500) level.

Broader Market Implications

Other analysts believe that while short-term fluctuations may continue, structural factors remain supportive for gold over the longer term. NS Ramaswamy, Head of Commodity & CRM at Ventura, noted that gold has remained resilient despite rising bond yields, which typically weigh on bullion prices. He added that over the longer term, gold prices in international markets could potentially surpass $5,600 per ounce, which could translate into domestic prices approaching ₹2 lakh per 10 grams if supportive macro conditions persist.