Gold futures rebound nearly 1% to Rs 1.44 lakh/10g on value buying

Gold futures rebounded by Rs 1,038 to Rs 1.44 lakh per 10 grams on Thursday after opening lower in domestic markets as value buying aided the rally, ending a three-session decline despite escalating tensions in West Asia.

On the Multi Commodity Exchange, gold futures for August delivery appreciated by Rs 1,038, or 0.72 per cent, to Rs 1,44,749 per 10 grams in a business turnover of 10,018 lots.

Traders said bargain hunting at lower levels lifted the precious metal after its recent correction, while a weaker US dollar also lent support to prices.

“However, prices were capped on the upside as renewed US-Iran tensions fuelled inflation concerns, strengthening expectations that the US Fed could keep interest rates higher for longer,” said Gaurav Garg, Research Analyst at Lemonn Markets Desk.

In the international markets, Comex gold futures for the August contract gained $36.44, or 1 per cent, to $4,118.84 per ounce in New York. Analysts said gold futures in the overseas trade pared losses to reclaim the $4,100 an ounce level on value buying after the recent selloff.

Fresh US military strikes on Iran and retaliatory actions by Tehran pushed crude oil prices higher, reviving fears of energy-driven inflation and capping gains on the upside in global trade, according to Manav Modi, Commodities Analyst, Motilal Oswal Financial Services Ltd.

Meanwhile, investors remained cautious after US President Donald Trump indicated that the interim ceasefire agreement and Memorandum of Understanding with Iran were effectively no longer valid, although diplomatic negotiations between the two nations are continuing.

“Traders will now closely monitor further developments in the Washington-Tehran conflict, upcoming US macroeconomic data and Federal Reserve commentary for clear signals on the policy outlook and the near-term direction of gold prices,” Modi said.