Gold Surges to Rs 1.6 Lakh/10gm as Geopolitical Tensions Ease and Weak Dollar Boost Sentiment

Gold Surges to Rs 1.6 Lakh/10gm as Geopolitical Tensions Ease and Weak Dollar Boost Sentiment​

Gold prices in major Indian cities rebounded sharply on Tuesday, reclaiming the highly coveted Rs 1.60 lakh per 10-gram level. The recovery was primarily driven by a decline in crude oil prices and a weakening US dollar, significantly lifting sentiment across the bullion market. Local markets saw the price of pure gold climb by Rs 1,500, reaching ₹1,60,300 per 10 grams (inclusive of all taxes), up from Monday's closing price of ₹1,58,800 per 10 grams.

Domestic Gold Rebounds on Investor Sentiment and Currency Shifts​

The domestic rally came despite global gold prices trading lower. Analysts credit the rise in Indian bullion prices to the specific dynamics of the US dollar and renewed investor interest in precious metals. Saumil Gandhi, Senior Analyst at HDFC Securities, stated that the rebound was supported by a decline in crude oil prices and a pullback witnessed in both the US dollar and Treasury bond yields. Silver markets also saw limited movement, maintaining stability at ₹2,55,700 per kilogram.

Geopolitical Stability Offers Relief to Precious Metals​

Market sentiment significantly improved following the agreement between Iran and Israel to halt attacks against each other. Comments from U.S. President Donald Trump regarding progress toward a formal ceasefire further boosted hopes for a diplomatic resolution in the region. This easing of geopolitical tensions has helped alleviate concerns related to energy driven inflation, providing substantial support to precious metals after recent periods of weakness.

International Markets Monitor Oil and Monetary Policy Trajectories​

In international trading, spot gold marginally slipped to $4,326.78 per ounce. Meanwhile, silver edged up slightly at $68.28 per ounce. Praveen Singh, Head of Commodities at Mirae Asset ShareKhan, added that traders are intensely seeking more clear clues regarding the ongoing situation in the Middle East before making definitive movements.

Outlook Hinges on CPI Data and Central Bank Actions​

The near-term outlook for precious metals remains focused on global monetary policy developments. Investors are closely watching upcoming releases of US Consumer Price Index and Producer Price Index, scheduled for Wednesday, to gauge clear signals regarding the Federal Reserve's future trajectory. As advised by Renisha Chainani, Head of Research at Augmont, the European Central Bank is also widely expected to deliver a rate increase this week, adding another layer of focus for investors.