Gold futures have plummeted for the seventh consecutive session, dropping to Rs 1.5 lakh per 10 grams, as escalating US-Iran military tensions drive up oil prices and intensify global concerns over inflation and potential interest rate hikes.
Key Points
- Gold futures for October delivery on the MCX fell by Rs 1,559 to Rs 1,50,170 per 10 grams, marking the seventh consecutive daily decline.
- The decline is attributed to renewed military exchanges between the US and Iran, which have driven up oil prices and heightened fears of inflation and interest rate hikes.
- US airstrikes on Iranian military targets and retaliatory actions by Tehran have fuelled concerns of a broader conflict in West Asia.
- Global Comex gold futures for December also fell, slipping by $46.46 to $4,349.94 per ounce in New York.
- Market participants are awaiting US employment data for clues on the Federal Reserve's interest rate path, with the FOMC monetary policy decision on September 16 being closely watched.
Gold futures fell for the seventh consecutive session on Wednesday, falling Rs 1,559 to Rs 1.5 lakh per 10 grams as renewed military exchanges between the US and Iran pushed oil rates higher and heightened concerns over inflation and interest rates.
On the Multi Commodity Exchange (MCX), the yellow metal futures for October delivery declined by Rs 1,559, or 1.03 per cent, to Rs 1,50,170 per 10 grams from Tuesday's closing level of Rs 1,51,729 per 10 grams.
Impact on Gold Contracts
The December contract also plunged by Rs 1,753, or 1.14 per cent, to Rs 1,51,540 per 10 grams compared to the previous close of Rs 1,53,293 per 10 grams.
Analysts noted that recent US airstrikes on Iranian military targets have triggered retaliatory action by Tehran targeting American military installations in Bahrain, Kuwait, Jordan and Iraq, fuelling concerns of a broader conflict.
"Gold futures fell to their lowest level in more than three weeks, as the escalating conflict in West Asia lifted oil prices and stoked inflation and interest rate-hike fears," Aamir Makda, Commodity & Currency Analyst, Technical Research, Choice Broking, said.
Global Market Trends
In global markets, Comex gold futures for the December contract fell for the fourth straight session, slipping by $46.46, or 1.06 per cent, to $4,349.94 per ounce in New York.
Gold fell more than 1 per cent, falling to a two-week low in overseas trade as renewed military exchanges between the US and Iran pushed oil prices sharply higher and intensified a global sell-off in bullion, said Akshat Siddhant, Lead Quant Analyst at investment platform Mudrex.
US Central Command's Statement
Meanwhile, the US Central Command (CENTCOM) forces said it had completed a new wave of strikes against Iranian military targets.
"The strikes follow recent attempted attacks by the Islamic Revolutionary Guard Corps (IRGC) against commercial shipping in the Strait of Hormuz and against American service members," CENTCOM said in a statement.
Makda said market participants would await US employment data for cues on the Federal Reserve's interest rate path.
According to analysts, the renewed focus on US economic data comes as investors assess whether the inflationary impact of higher energy prices could influence the Fed's FOMC monetary policy decision on September 16.
