Gold Plunges Down as Traders Await US-Iran Peace Deal and Global Monetary Clues

Gold Plunges Down as Traders Await US-Iran Peace Deal and Global Monetary Clues​

Gold prices are expected to trade within a narrow range next week as global investors focus intently on multiple converging factors. Market participants are closely monitoring key monetary policy decisions from central banks worldwide, alongside developments in the high-stakes US-Iran negotiations. This cautious approach highlights the dual influence of geopolitical stability and future interest rate movements on precious metals.

Domestic Metal Prices See Sharp Decline​

The yellow metal experienced a volatile week on the domestic front. Gold futures for August delivery on the Multi Commodity Exchange (MCX) recorded a sharp decline, falling by Rs 5,066 or 3.2 per cent. It settled at approximately Rs 1.50 lakh per 10 grams.

Silver prices also saw losses domestically. Silver futures for July delivery declined by Rs 2,351 or nearly 1 per cent, concluding the week at Rs 2.46 lakh per kilogram. Experts noted that these sharp declines were weighed down by ongoing uncertainty surrounding the US-Iran negotiations and easing concerns within the energy market.

International Markets Tumble amid Geopolitical Shifts​

Globally, Comex gold futures closed down USD 126.5 or nearly 3 per cent for the week, settling at USD 4,238.8 per ounce. Silver futures saw a slip of USD 1.13 or 1.6 per cent, closing at USD 67.97 per ounce.

Despite the overall downward trend, sentiment momentarily improved during the final trading sessions. This recovery occurred after reports surfaced that no immediate military action would be taken against Iran, which revived safe-haven demand and helped bullion recover part of its weekly losses. Analysts indicated a significant potential for an extended rally in risk assets if the US-Iran agreement is formally signed.

Key Catalysts Guiding Market Outlook​

The finalization of the US-Iran agreement remains a paramount factor influencing bullion prices. As noted by market analysts, any escalation in tensions would negatively impact global markets immediately. Conversely, formal signing could provide a major upward boost to gold and silver.

Investors will also closely track policy meetings scheduled for the Bank of Japan, the US Federal Reserve, and the Bank of England. Crucial inflation data from Germany, the Eurozone, UK, and Japan will serve as critical signals regarding the global interest rate outlook. Furthermore, the G7 Summit in France is expected to provide fresh cues on the near-term trajectory of precious metals concerning Iran and Ukraine conflicts.

Lingering Headwinds Persist for Bullion Prices​

While the market showed signs of recovery amid peace deal reports—with prices rebounding more than 5 per cent after the US dollar weakened and bond yields eased—caution remains high.

Market participants are being mindful that uncertainty will persist until both parties formally sign any agreement. Additionally, expectations of a prolonged high interest rate environment extending through at least the first half of 2027 continue to weigh on bullion prices. Continued liquidation by exchange-traded fund investors also contributes to this persistent caution.