SRINAGAR: Gold prices rose sharply by Rs 1,853 to Rs 1.62 lakh per 10 grams in futures trade on Tuesday, supported by a weaker US dollar and stronger global sentiment that boosted demand for the safe-haven metal.
Data from the Multi Commodity Exchange (MCX) showed that gold contracts for April delivery increased by Rs 1,853, or 1.16 per cent, to Rs 1,62,152 per 10 grams, with a trading volume of 7,355 lots.
Market analysts said the rise helped gold recover losses recorded in the previous session after the US dollar weakened following remarks by US President Donald Trump indicating that the conflict with Iran might be nearing an end.
In international markets, Comex gold futures for the April contract climbed by USD 75.91, or 1.5 per cent, to USD 5,179.61 per ounce.
Meanwhile, the dollar index, which tracks the US currency against a basket of six major currencies, declined by 0.34 per cent to 98.84, further supporting gold prices in global markets.
According to Jigar Trivedi, Senior Research Analyst at IndusInd Securities, gold prices moved close to USD 5,180 per ounce as the dollar weakened after Trump suggested that tensions in the Middle East could soon subside.
Trump on Monday attempted to reassure financial markets amid ongoing military tensions with Iran, describing the operation as a brief and limited action.
Trivedi also noted that earlier fears of a prolonged conflict potentially pushing inflation higher had led traders to reduce expectations of interest rate cuts by the US Federal Reserve this year.
Market participants now expect around 40 basis points of rate cuts by the end of the year, compared with more than 55 basis points anticipated in late February.
Investors are now looking ahead to key economic indicators, including the Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE) data scheduled for release later this week, for further signals on the Federal Reserve’s monetary policy outlook and the near-term direction of gold prices.
