Gold Prices Surge on MCX Amid Global Cues and Geopolitical Hopes
Gold prices traded significantly higher in the domestic futures market on Tuesday, driven by firm global cues and improved market sentiment. This uptick came amid easing dollar pressure and renewed optimism surrounding geopolitical negotiations, particularly between the United States and Iran.
Domestic Futures Market Performance
On the Multi Commodity Exchange (MCX), gold futures for the June 2026 contract experienced a notable rise. The contract increased by Rs 1,981, or 1.30%, reaching Rs 1,54,053 per 10 grams. During the trading session, it touched a high of Rs 1,54,170 and a low of Rs 1,52,700.
The August 2026 contract also showed strong gains, climbing Rs 2,024, or 1.31%, to trade at Rs 1,56,645 per 10 grams. This contract hit an intraday high of Rs 1,56,855.
Additionally, the October 2026 contract edged higher by Rs 1,231, or 0.78%, settling at Rs 1,58,401 per 10 grams.
International Market Trends
In the international market, spot gold rose by 1.5% to $4,808.69 per ounce by 11:31 a.m. ET, while US gold futures gained 1.4% to $4,833.10, as reported by Reuters. This global strength contributed to the positive momentum in domestic trading.
Factors Driving the Rally
Market sentiment improved following reports that negotiating teams from the US and Iran could return to Islamabad this week to restart talks. This development came after the collapse of weekend discussions, which had led Washington to impose a blockade on Iranian ports.
Bob Haberkorn, senior market strategist at RJO Futures, commented on the situation, stating, "The direction of the gold market will depend on how the talks go in Pakistan and what kind of progress is made heading into the weekend. If we see positive news, metals will continue higher."
He added, "Lower dollar, lower oil right now is helping gold out, being that when the war started, there was a rush to cash and a concern about being able to accumulate energy supplies."
The US dollar drifted lower, and oil prices also eased, making dollar-denominated bullion more affordable for holders of other currencies. This dynamic supported gold's appeal as a safe-haven asset.
Economic Data and Rate Expectations
Recent data showed that US producer prices increased less than expected in March, with the cost of services remaining unchanged. However, rising energy prices linked to the Iran war continued to fuel inflation pressures.
Despite gold being viewed as an inflation hedge, it tends to lose appeal in a higher interest rate environment since it does not offer yield. Currently, traders are pricing in a 28% probability of a US rate cut this year, compared with expectations of two rate cuts before the conflict began.
Analysts at Commerzbank noted, "As long as the market does not begin to seriously consider a rate hike by the US Federal Reserve – there are no signs of this so far – the gold price is unlikely to fall much further."
Other Precious Metals Performance
Among other precious metals, spot silver surged 4.7% to $79.12 per ounce, platinum rose 0.9% to $2,088.13, while palladium edged 0.2% lower to $1,571.02. This broad-based strength in the precious metals sector underscored the positive market sentiment driven by geopolitical and economic factors.
