MCX Gold Price Surges Above ₹1.59 Lakh Per 10 Grams as Silver Price Declines Amid Escalation of US-Iran Tensions

Global Bullion Market Sentiment Weakens Amid US-Iran War-led Inflation Risk

The gold prices in India opened marginally higher on the Multi Commodity Exchange on Wednesday, following a weak sentiment in the global bullion market. Fears of higher interest rates due to the US-Iran war-led inflation risk have dented the safe-haven appeal for precious metals.

On the MCX, the gold rate for August futures contracts opened 0.06% higher at ₹1,59,447 per 10 grams, as against its previous close of ₹1,59,346 level. In contrast, the MCX silver rate for July futures contracts opened 0.01% lower at ₹2,66,668 per kg, compared with its previous close of ₹2,66,707 level.

At 9:10 AM, the MCX gold price was trading higher by ₹24, or 0.02%, at ₹1,59,370 per 10 grams, while the MCX silver price was down by ₹491, or 0.18%, at ₹2,66,216 per kg.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

In the international market, gold prices declined, as fresh escalation in the US-Iran war in the Middle East pushed crude oil prices higher, cementing fears that interest rates would stay higher for longer to tame inflation. The spot gold price fell 0.2% to $4,476.50 per ounce, while US gold futures for August delivery dropped 0.3% to $4,504.40. The spot silver price fell 0.5% to $74.73 per ounce.

The US-Iran war in the Middle East escalated, with the US military saying Iranian missile attacks on Bahrain, Kuwait, and other regional targets were either thwarted or failed as diplomacy between Washington and Tehran showed little progress. Crude oil prices jumped over 1%, deepening concerns over inflation and interest rate hikes.

Meanwhile, Cleveland Federal Reserve President Beth Hammack said on Tuesday that the US central bank may need to raise interest rates soon should already-high inflation pressures continue to mount, Reuters reported.

According to Jigar Trivedi, Senior Research Analyst at IndusInd Securities, gold remains near historically elevated levels, supported by persistent geopolitical risks, central-bank purchases, and demand for safe-haven assets amid an uncertain global economic backdrop.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Attention is now turning to Friday's closely watched nonfarm payrolls report, a key gauge of labor market strength that could provide further clues on the Federal Reserve's policy path in the months ahead, Trivedi added.

Trivedi believes that the outlook for the MCX gold and silver prices remains weak. "MCX gold price has support at ₹1,59,000 level, while it may face resistance at ₹1,60,000 level. MCX silver price may find support at ₹2,64,000, while resistance is placed at ₹2,68,000 level," he said.