Gold futures rise to Rs 1.44 lakh/10g on weak dollar
Gold prices on Monday rose by Rs 984 to Rs 1.44 lakh per 10 grams in futures trade as a weak US dollar in overseas markets and easing geopolitical worries boosted demand in physical markets.
On the Multi Commodity Exchange, the yellow metal contracts for August delivery traded higher by Rs 984, or nearly 1 per cent, to Rs 1,44,090 per 10 grams in a business turnover of 591 lots.
On the domestic front, gold futures for August delivery rose Rs 2,200, or 1.6 per cent, to close at Rs 1.43 lakh per 10 grams during the last week.
“Gold prices rose on Monday as investors increased buying following a temporary pause in Washington-Tehran hostilities and ahead of this week’s US Federal Reserve interest policy decision,” said Gaurav Garg, Research Analyst at Lemonn Markets Desk.
In the overseas markets, Comex gold futures for August delivery rose nearly 1 per cent to $4,087.69 per ounce in New York. Last week, gold edged up $52, or 1.3 per cent, to settle at $4,070.8 per ounce.
“Gold prices traded higher, driven by a weak dollar and easing geopolitical tensions after the US and Iran paused military strikes over the weekend, although gains remained limited as investors awaited the Federal Reserve’s policy decision later this week,” said Manav Modi, Commodities Analyst at Motilal Oswal Financial Services Ltd.
Meanwhile, US President Donald Trump halted the bombing campaign after 13 consecutive days to allow diplomatic efforts to proceed, while Iran refrained from retaliatory attacks.
Modi said this led to a sharp decline in crude oil prices of more than 7 per cent in both domestic and international markets and eased immediate concerns over supply disruptions through the Strait of Hormuz and the Red Sea.
The softer oil prices helped reduce near-term inflation fears, even as uncertainty surrounding global trade persisted following the US decision to impose fresh tariffs of 10-12.5 per cent on imports from several trading partners.
The weak US dollar index further supported bullion by making it more attractive for overseas buyers, he added.
Investors are also closely monitoring Federal Reserve Chair Kevin Warsh’s speech for guidance on the future interest rate path and inflation outlook.
“While swap markets continue to price a modest probability of a rate hike, market participants will also watch upcoming US inflation and labour market data, with the Fed’s policy outcome expected to be the key driver for bullion prices in the near term,” Modi said.
