Gold extends losses in futures trade amid inflation, West Asia crisis

Extending losses for the fifth consecutive session, gold prices fell Rs 277 to Rs 1.47 lakh per 10 grams in futures trade on Thursday, tracking losses in the international markets as investors grappled with persistent geopolitical tensions in West Asia and its impact on inflation and interest rates.

On the Multi Commodity Exchange, the yellow metal for August delivery decreased by Rs 277, or 0.19 per cent, to Rs 1,47,740 per 10 grams.

Analysts said precious metals remained under pressure as elevated energy prices and higher US economic data reignited expectations that interest rates could stay higher for longer.

“Gold prices slipped in the domestic markets on Thursday amid escalating tensions between the US and Iran, which have fuelled uncertainty in the markets,” Gaurav Garg, Research Analyst at Lemonn Markets Desk, said.

In global markets, Comex gold futures for the August contract slipped for the fifth consecutive session, falling by USD 17.23, or 0.42 per cent, to USD 4,116.07 per ounce in New York.

“Gold continues its fall towards USD 4,000 per ounce even though the US military’s confirmation that its latest strikes on Iran had concluded, fuelling hope that peace talks might restart and easing some inflation worries,” Renisha Chainani, Head of Research at Augmont, said.

She, however, noted that the prolonged conflict and the near-complete shutdown of the Strait of Hormuz continued to disrupt energy supplies from the Persian Gulf, stoking fears of renewed inflation and possible central bank rate increases.

On Wednesday, President Donald Trump stated that Iran had delayed negotiations for too long and would now “have to pay the price”.

In response to US strikes on Iranian sites near the Strait of Hormuz, Iran retaliated with missile and drone attacks on American bases in Jordan, Kuwait, and Bahrain. According to Chainani, US inflation rose in May to its highest level in over three years, driven by sharp increases in energy prices, and fresh comments from President Trump have kept market sentiment cautious. Market participants are closely tracking developments in West Asia and upcoming macroeconomic indicators for fresh cues on the US Federal Reserve’s policy path and the near-term direction of bullion prices.