Gold prices on Tuesday (August 27) marginally declined to ₹72,037 per 10 grams in futures on the Multi Commodity Exchange (MCX). The dip in prices follows weak global cues, with gold contracts for October delivery trading in a business turnover of 16,936 lots.

Globally, gold prices fell by 0.20% to $2,550 per ounce in New York.

Analysts attributed this decline to weak global signals, as gold markets responded to a mix of geopolitical tensions and economic forecasts.

“Gold prices inched lower but remained in sight of the record highs it hit last week as the prospect of lower US interest rates battered the dollar and presented a brighter outlook for metal markets,” said Navneet Damani, Group Senior VP – Commodity Research at Motilal Oswal Financial Services.

He noted that while gold surged to record highs last week, market participants are closely monitoring the Federal Reserve’s dovish stance, which has weakened the dollar and provided a supportive environment for gold prices.

“Safe-haven demand also buoyed gold as ceasefire talks between Israel and Hamas yielded few results, while hostilities in the Middle East persisted,” Damani added.

Prathamesh Mallya, DVP-Research, Non-Agri Commodities and Currencies at Angel One, echoed similar sentiments.

“Investors responded to dovish signals from Federal Reserve Chair Jerome Powell and escalating geopolitical tensions in the Middle East,” Mallya explained.

He highlighted that Powell’s endorsement of imminent rate cuts, coupled with safe-haven demand following Hezbollah’s rocket and drone attacks on Israel, supported bullion’s appeal.

Gold traditionally serves as a hedge against geopolitical risks, thriving in a low-interest-rate environment.

Mallya further noted, “Additionally, gold demand in key markets like India and China is expected to rise in the coming months, further supporting prices.”

Looking ahead, both experts agree that gold prices are likely to remain elevated, supported by ongoing safe-haven demand amid Middle East tensions and anticipation of potential US rate cuts.

On the domestic front, Damani mentioned that prices could hover in the range of ₹71,300 per 10 grams to ₹72,300 per 10 grams, while globally, prices on the COMEX could trend between $2,455 per ounce and $2,485 per ounce.