Gold Futures Climb Nearly 1% To ₹1.42 Lakh, Investors Track US-Iran Ceasefire Talks

New Delhi: Gold futures rose sharply on Tuesday as investors followed diplomatic efforts to reduce tensions between the United States and Iran. Firm prices in international markets also supported domestic bullion.

On the Multi Commodity Exchange (MCX), gold contracts for August delivery increased by Rs 988, or nearly 1 percent, to Rs 1,42,376 per 10 grams. The contract recorded a business turnover of 551 lots.

Global Prices Rise

International gold prices also registered strong gains. Comex gold futures for August delivery advanced by USD 66.30, or nearly 2 percent, to USD 4,082.20 per ounce.

Gold recovered after finding support near USD 3,960 per ounce in the overseas market. Reports suggested that Iran had received a proposal from mediators for a 10-day ceasefire, improving market sentiment.

Gaurav Garg, Research Analyst at Lemonn Markets Desk, said gold prices moved higher in the domestic market as tensions surrounding the US-Iran conflict showed signs of cooling. This eased some concerns about rising global energy costs.

Inflation Concerns

Renisha Chainani, Head of Research at Augmont, said the continuing standoff between the US and Iran has kept investors cautious. Higher energy prices could increase inflation and influence the US Federal Reserve’s future interest rate decisions.

Gold may remain under pressure in the short term because of expectations of tighter monetary policy and a strong US dollar. Higher interest rates generally reduce the appeal of gold because the metal does not offer regular interest income.

However, Chainani said investor positions in gold remained relatively light after several months of outflows from gold exchange-traded funds. This could limit any major fall in bullion prices.

Demand Provides Support

Strong physical demand from China and continued gold purchases by central banks are also supporting prices.

Manav Modi, Commodities Analyst at Motilal Oswal Financial Services, said traders will closely monitor developments in the US-Iran conflict.

Currency movements and the European Central Bank’s upcoming policy decision will also provide fresh direction to gold prices. Any major change in the dollar, interest-rate expectations or geopolitical tensions could influence bullion prices in the near term.