Gold Futures Decline for Seventh Consecutive Session Amid US-Iran Tensions

Gold futures declined for the seventh consecutive session on Wednesday, falling by Rs 1,559 to Rs 1.5 lakh per 10 grams. The downward movement comes as renewed military exchanges between the US and Iran pushed oil rates higher, stoking market concerns over inflation and potential interest rate hikes.

On the Multi Commodity Exchange (MCX), gold futures for October delivery declined by Rs 1,559, or 1.03 per cent, to trade at Rs 1,50,170 per 10 grams compared to Tuesday's close of Rs 1,51,729 per 10 grams. Similarly, the December contract plunged by Rs 1,753, or 1.14 per cent, to Rs 1,51,540 per 10 grams from its previous close of Rs 1,53,293 per 10 grams.

Market analysts noted that recent US airstrikes on Iranian military targets have triggered retaliatory actions by Tehran against American military installations in Bahrain, Kuwait, Jordan, and Iraq, raising fears of a broader geopolitical conflict.

Aamir Makda, Commodity & Currency Analyst for Technical Research at Choice Broking, stated that gold futures reached their lowest level in more than three weeks as the escalating conflict in West Asia lifted oil prices and fueled fears of inflation and interest rate hikes.

In global markets, Comex gold futures for the December contract fell for the fourth straight session, dropping by USD 46.46, or 1.06 per cent, to USD 4,349.94 per ounce in New York. Akshat Siddhant, Lead Quant Analyst at investment platform Mudrex, noted that bullion experienced a global sell-off as the renewed military exchanges pushed oil prices sharply higher.

The US Central Command (CENTCOM) stated that it completed a new wave of strikes against Iranian military targets following attempted attacks by the Islamic Revolutionary Guard Corps (IRGC) against commercial shipping in the Strait of Hormuz and American service members.

Looking ahead, market participants are closely monitoring upcoming US employment data for cues regarding the Federal Reserve's future interest rate path. Investors are currently assessing whether the inflationary impact of higher energy prices will influence the Federal Open Market Committee (FOMC) monetary policy decision scheduled for September 16.

"Geopolitical tensions in West Asia continue to create significant volatility across global commodity markets, directly impacting precious metals and crude oil prices. For businesses and investors navigating macroeconomic uncertainty, monitoring inflation trends and central bank policy decisions, such as the upcoming Federal Reserve path, remains critical for managing financial risk and capital allocation during turbulent market cycles." — Dr. Shishir Gupta, Founder & CEO, StartupLanes