Gold prices have seen a notable decline in the national capital, influenced by tentative progress in US-Iran negotiations, though persistent tensions around the Strait of Hormuz continue to fuel market caution.
Photograph: Heinz-Peter Bader/Reuters
Key Points
- Gold prices in New Delhi dropped by Rs 600 to Rs 1.64 lakh per 10 grams, breaking a three-day winning streak.
- The decline is attributed to tentative progress in US-Iran negotiations, which has eased market anxiety and reduced demand for safe-haven assets.
- Despite diplomatic signs, unresolved tensions regarding the Strait of Hormuz and Washington’s warning on toll-free shipping are keeping investors cautious.
- International spot gold also fell marginally to $4,522.32 per ounce, with silver slipping 1 per cent.
- Market analysts note that geopolitical tensions, Indian rupee volatility, and crude oil prices are key factors influencing bullion market fluctuations.
Gold prices retreated by Rs 600 to Rs 1.64 lakh per 10 grams in the national capital on Friday as tentative progress in US-Iran negotiations reduced precious metals buying, though unresolved tensions around the Strait of Hormuz kept traders cautious.
Snapping a three-day winning streak, the yellow metal of 99.9 per cent purity depreciated by Rs 600 to Rs 1,64,900 per 10 grams (inclusive of all taxes), according to local marketmen.
Geopolitical Factors Influencing Gold
Gold prices witnessed a slight decline on Friday.
The recent fluctuations in the bullion market are largely influenced by ongoing geopolitical tensions, particularly concerning US-Iran relations, alongside the volatility of the Indian rupee and movements in crude oil prices, Gaurav Garg, Research Analyst at Lemonn Markets Desk, said.
However, silver prices remained flat at Rs 2,71,000 per kilogram in the bullion market.
International Market Trends
In the international markets, spot gold fell marginally lower to $4,522.32 per ounce, while silver slipped 1 per cent to $75.87 per ounce.
“Spot gold trading lower to $4522 per ounce on Friday as despite narrowing differences between Iran and the US, nuclear and Hormuz control remain contentious issues,” Praveen Singh, Head of Commodities at Mirae Asset ShareKhan, said.
Strait of Hormuz Concerns
Meanwhile, Washington has warned that shipping through the Strait of Hormuz should remain toll-free, keeping investors cautious despite signs of diplomatic progress between the US and Iran.
Bullion prices pared some losses after US Secretary of State Marco Rubio described the negotiations as showing tentative progress, though he flagged Hormuz control as a major sticking point.
