MCX gold rises on oil dip, but Middle East risks dominate
A temporary retreat in crude oil prices lifted Indian gold and silver futures, though precious metals face sustained pressure from Middle East escalation and looming US interest rate hikes.
Gold and silver prices on the Multi Commodity Exchange of India (MCX) climbed on Tuesday morning as Brent crude dropped below $90 per barrel. The move followed the end of a recent round of US airstrikes targeting Iran, which briefly cooled the inflationary pressures weighing on non-yielding assets. MCX gold August delivery rose 0.63% to ₹1,42,279 per 10 grams, while September silver futures jumped 1.11% to ₹2,20,825 per kilogram.
The relief in bullion prices highlighted the market's primary macro concern. A prior surge in crude above $90 had stoked fears that global central banks, particularly the US Federal Reserve, would resume monetary tightening to combat rising inflation. Higher interest rates increase the opportunity cost of holding bullion, typically dragging prices lower.
Despite the morning rally, underlying tensions remain highly elevated, threatening to reverse the gains. Iran-backed Houthis threatened to impose a naval blockade on Saudi Arabia, a move that would open a new front in the US-Iran conflict and severely threaten global energy supplies. Concurrently, Lebanese President Joseph Aoun is meeting US President Donald Trump in Washington as pressure mounts for Beirut to disarm Hezbollah.
The dual forces of geopolitical risk and macroeconomic tightening are creating a volatile trading environment. "The US-Iran war is pushing crude oil prices higher and reigniting inflation fears. The dollar index is rising, and the U.S. 10-year bond yields are also trading steady at higher levels. The U.S. Fed monetary policy meetings later this month and any peace proposal in the Middle East could be a trend decider for bullion markets," said Manoj Kumar Jain of Prithvifinmart Commodity Research.
Traders are closely watching defined technical parameters to navigate the swings. On the international market, analysts peg gold support at $3,989 and resistance at $4,040, with silver support at $56.20 and resistance at $57.70. Domestically, consensus places immediate MCX gold support around ₹1,40,400 to ₹1,40,850, with resistance between ₹1,42,000 and ₹1,43,650. Jateen Trivedi of LKP Securities specifically highlighted ₹1,40,000 as the immediate floor, while Jigar Trivedi of IndusInd Securities noted ₹1,42,000 as a near-term target.
Given the unpredictable geopolitical triggers, market participants are advised to manage risk tightly. "We suggest long-term investors could accumulate gold and silver through SIP in this market fall, while traders must book profits on every rise, maintaining a stop loss below the given support levels on a closing basis," Jain added.
