Gold Prices Decline Amid Rising Oil Costs and Central Bank Rate Hikes
Gold Prices Fall Below ₹1,50,000 Mark Amid US-Iran Conflict
Gold prices on the Multi Commodity Exchange (MCX) fell under selling pressure on May 1, 2026, with MCX gold futures for June delivery dropping as much as 0.90%, or ₹1,369 per 10 grams, to an intraday low of ₹1,49,742. This decline was driven by rising crude oil prices amid the US-Iran conflict, which dampened expectations of a near-term rate cut by the central bank.
The decline in gold prices was also reflected in the international market, with US spot gold falling 1.1% to $4,568.82 per ounce. This put US spot gold on track for a weekly decline of 1.2%. US gold futures for June delivery also slipped 1.1% to $4,579.70. The decline in gold prices can be attributed to several factors, including the US-Iran conflict, rising oil prices, and the dollar weakening against other major currencies.
| Market | Price (₹) | Price ($/oz) | Change |
|---|---|---|---|
| MCX Gold Futures (June) | 1,49,742 | - | -0.90% |
| US Spot Gold | - | $4,568.82 | -1.1% |
| US Gold Futures (June) | - | $4,579.70 | -1.1% |
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
The decline in gold prices has been ongoing since the onset of the Iran conflict in late February. Despite gold's usual appeal as a safe-haven asset during geopolitical tensions, the metal has failed to gain traction. However, experts believe that the outlook for gold remains cautiously positive, with prices expected to remain well-supported at lower levels.
Sugandha Sachdeva, Founder of SS WealthStreet, noted that the macro backdrop remains dynamic, with central bank signals playing a decisive role in shaping sentiment. Ponmudi R, CEO of Enrich Money, believes that gold and silver witnessed intermittent profit booking at higher levels, while selective buying interest emerged near key support zones. Sachdeva also noted that gold is undergoing a consolidation phase, with early signs of base formation emerging.
| Technical Indicators | Support | Resistance |
|---|---|---|
| Domestic Market | ₹148,000-147,500 | ₹156,000 |
| International Market | $4,400/oz | $4,550-$4,600/oz |
As long as key supports hold, dips are likely to attract buying interest. The US Non-Farm Payrolls data lined up towards the end of the upcoming week will be a critical trigger, providing further cues on the Fed's policy trajectory and shaping the next directional move in gold.
Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline
Investor Takeaway
Investors should be cautious of the impact of rising oil costs and central bank rate hikes on gold prices.
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