Gold declines Rs 853 to Rs 1.62 lakh/10g amid global bearish sentiment

New Delhi: Gold prices declined Rs 853 to Rs 1.62 lakh per 10 grams in futures trade on Wednesday tracking a bearish sentiment in the international markets amid mixed signals surrounding the ongoing conflict in West Asia.

According to the Multi Commodity Exchange, the yellow metal for April delivery depreciated by Rs 853, or 0.52 per cent, to Rs 1,62,450 per 10 grams in a business turnover of 7,529 lots.

Analysts said the recent gains in the precious metal prices faded as developments surrounding the conflict involving the US, Israel and Iran remained uncertain, keeping the investors cautious.

In the international markets, gold futures on the Comex for April delivery slipped USD 30.15, or 0.58 per cent, to USD 5,211.95 per ounce.

"Part of the gains faded amid conflicting developments surrounding the ongoing US-Israel conflict with Iran. The evolving geopolitical situation continues to cloud the outlook for Washington's monetary policy, particularly expectations for potential interest rate cuts," Manav Modi, Commodities Analyst, Motilal Oswal Financial Services Ltd, said.

He noted that traders positioning also reflected caution as holdings in gold-backed exchange traded funds (ETFs) declined sharply. Total holdings fell by nearly 30 tonnes last week, marking the largest weekly outflow in more than two years.

"Despite the outflows, bullion remained supported by safe-haven demand as markets assessed the potential for disruptions in global energy supplies and the possibility of a resolution to the conflict," Modi added.

According to analysts, mixed signals on the war have resulted in volatile trading conditions. Earlier, President Donald Trump signalled that the conflict could end soon, but continued strikes between the US, Israel, and Iran by early Wednesday indicated little immediate de-escalation, extending the conflict into its 12th consecutive day.

"Investors are closely monitoring the upcoming US inflation data which can fresh cues on the Federal Reserve's policy outlook and near-term trajectory for the precious metals," Jigar Trivedi, Senior Research Analyst at IndusInd Securities, said.

Silver prices plunged Rs 4,269 to Rs 2.73 lakh per kilogram in futures trade on Wednesday as a strong US dollar weighed on the precious metal despite ongoing geopolitical tensions in West Asia.

On the Multi Commodity Exchange, silver for May delivery plunged Rs 4,269, or 1.54 per cent, to Rs 2,73,581 per kilogram in a business turnover of 5,839 lots.

Analysts said the white metal remained under pressure as investors their shifted focus to the US dollar, which tends to influence demand for non-yielding assets such as precious metals.

Globally, Comex silver futures for may contract fell by USD 2.03, or 2.3 per cent, to USD 87.55 per ounce.

"Silver prices are currently influenced by competing macro forces. On one side, escalating geopolitical tensions in the Middle East are sustaining demand for safe-haven assets. On the other hand, the strengthening US dollar and rising Treasury yields are limiting the metal's upside," Renisha Chainani, Head of Research at Augmont, said.

She added that tensions in the Middle East continue to keep investors cautious as military developments in the region intensified.

Meanwhile, the United States and Israel have stepped up airstrikes on Iran, with analysts describing them as among the most aggressive attacks of the conflict so far.

These developments have dampened earlier expectations of a near-term ceasefire, despite President Donald Trump suggesting that the conflict could conclude soon, Chainani added.