Gold rises yet again, touches Rs 1.56 lakh/10 grams as US-Iran tensions boost safe-haven buying

Gold prices rebounded in futures trade on Friday, rising 1.31 per cent to hover near Rs 1.56 lakh per 10 grams, supported by firm global cues and renewed geopolitical tensions between the United States and Iran that reinforced safe-haven demand. On the Multi Commodity Exchange (MCX), April gold futures advanced by Rs 1,315, or 0.85 per cent, to Rs 1,56,134 per 10 grams, with a business turnover of 7,355 lots. The domestic rally tracked strength in international markets, where COMEX gold futures for April delivery climbed $49.55, or 1 per cent, to $5,046.95 per ounce.

Despite the rebound, gold continues to trade in a largely sideways pattern, weighed by a firm US dollar. A stronger greenback typically makes bullion more expensive for holders of other currencies, thereby capping demand. Trading volumes also remained relatively subdued due to the closure of mainland Chinese markets for the Lunar New Year, limiting physical demand from one of the largest consuming regions.

Minutes from the latest US Federal Open Market Committee (FOMC) meeting showed policymakers divided over the trajectory of interest rates. While some members signalled that rate hikes could resume if inflation remains elevated, markets, according to the CME FedWatch tool, are still pricing in at least two rate cuts this year. Gold generally performs well in a lower interest rate environment, as the opportunity cost of holding non-yielding assets declines.

Geopolitical developments remain a key driver. Escalating tensions between the US and Iran have revived safe-haven flows into bullion, although intermittent signs of diplomatic engagement have kept gains in check.

Manav Modi, Commodities Analyst at Motilal Oswal Financial Services Ltd., noted that safe-haven demand had briefly weakened after indications of easing tensions, particularly as Iran and the US reached an understanding on guiding principles for future nuclear negotiations during talks in Geneva. However, he highlighted that gold ETF holdings continued to edge higher, reflecting sustained institutional interest. Physical demand in India and China has also remained resilient, with India’s January gold imports showing an uptick.

From a technical standpoint, Ponmudi R, CEO of Enrich Money, said COMEX gold is currently trading in the $4,850–$5,100 zone following a correction from recent highs above $5,500–$5,600. He described the broader uptrend as intact, with the recent pullback representing profit booking and price consolidation. Strong buying interest is visible in the $4,500–$4,700 support band. A breakout above $5,100–$5,200 could open the path toward a retest of record highs.

On the domestic front, MCX gold futures are consolidating in the ₹1,50,000–₹1,60,000 range after correcting from all-time highs near ₹1,80,000–₹1,81,000. Key support is seen in the ₹1,45,000–₹1,50,000 zone. A sustained move above ₹1,60,800 could push prices toward ₹1,65,000–₹1,75,000, keeping the medium-term outlook constructive despite ongoing volatility.

Jateen Trivedi, VP Research Analyst at LKP Securities, observed that gains were capped near the $5,000–$5,025 resistance zone on COMEX and ₹1,57,500–₹1,58,500 on MCX, as delayed rate cut expectations and profit booking limited upside momentum. Volatility is likely to persist amid geopolitical headlines and evolving Fed policy cues.

Hareesh V of Geojit Investments added that persistent or escalating tensions could continue to support risk-averse flows into gold, though a strong dollar and shifting rate expectations may temporarily restrain sharp advances.

Aksha Kamboj, Vice President of the India Bullion & Jewellers Association (IBJA), said gold’s rebound follows one of its steepest recent declines, signalling bargain buying at lower levels. While near-term fluctuations may continue, the broader sentiment toward the yellow metal remains positive as investors reassess global risks and monetary policy trends.