Gold Prices Rangebound as Ceasefire Talks, Rate Outlook Weigh on Demand

"Gold remained below USD 4,700 per ounce on Monday as markets reacted to reports of a possible 45-day ceasefire between the U.S., Iran and regional mediators," said Amit Gupta, Senior Research Analyst - Commodities at Kedia Advisory. "While easing tensions reduced immediate safe-haven demand, risks remain elevated due to ongoing threats and continued attacks on energy infrastructure."

Gupta added that gold has declined around 12 per cent since the conflict began, as rising energy prices have fueled inflation concerns and strengthened expectations of further interest rate hikes.

The Middle East conflict escalated tensions between Israel and Iran over a month back, involving proxy attacks, energy infrastructure disruptions and global market volatility, raising concerns over oil supplies, inflation and broader regional stability.

Gupta also pointed to forced liquidations, with investors reallocating funds to cover losses in other asset classes, as an additional drag on prices.

Echoing the cautious outlook, Ravinder Kumar, Senior Research Analyst at SMC Global Securities, said gold is currently in a short-term bearish trend.

"On the daily chart, gold prices are in a short-term bearish phase with USD 4,280 acting as a crucial support level and USD 4,800 as resistance," he said. "While immediate momentum remains under pressure, this correction is being seen as a healthy consolidation within a broader cycle."

Kumar noted that institutional demand has shown signs of moderation. According to the latest World Gold Council data, central banks purchased about 19 tonnes of gold recently, compared with 26 tonnes in 2025. Despite the slowdown, he said central banks continue to prioritize gold as a key reserve asset.

He added that gold demand in India and China remains strong, supported by currency depreciation trends over the past year.

However, a recent appreciation in the Indian rupee has contributed to downward price adjustments on the MCX. Kumar also flagged that a sharp rise in oil prices--estimated at around 75 per cent--could push global inflation higher, reinforcing gold's traditional role as a hedge, even as near-term pressures persist. A sustained break above USD 4,800 could open the path toward USD 5,100, he said.

Dinesh Somani, Founder, Intellitrade, highlighted that the ongoing Middle East conflict has, unusually, had a negative impact on bullion prices.

"For the first time, the war has weighed on gold despite its safe-haven status," he said, noting that prices fell from around USD 5,600 per ounce on COMEX to near USD 4,100 during the recent correction.

Somani attributed the decline to a combination of factors, including fading ETF demand, slower central bank buying and expectations of higher interest rates amid rising crude oil prices. He also pointed out that some central banks have offloaded gold reserves, adding to market pressure.

"In the absence of fresh triggers, gold is likely to remain range-bound," Somani said, pegging the near-term band between USD 4,100 and USD 4,970 per ounce.

Analysts broadly agree that while geopolitical risks remain, the interplay of inflation, oil prices and monetary policy will be the dominant drivers in the near term, keeping gold in a choppy consolidation phase rather than a decisive trend.

- ANI