Gold, silver prices fall amid geopolitical tensions in West Asia
What's the story
Gold futures slipped 0.15% lower to ₹1,51,119 per 10gm on MCX today. The decline comes as investors closely monitor the ongoing geopolitical tensions in West Asia. The international spot gold also traded 0.83% lower at $4,606 per ounce on Comex. Silver followed suit with a dip of 0.9% from its previous close price.
Market trends
Geopolitical tensions and their impact on global markets
VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said that crude oil prices will dictate the real market trend. He added that President Trump's announcement of US assistance to ships in the Strait of Hormuz has brought Brent crude down to around $108. This is a significant development amid rising energy costs and inflation concerns globally.
Price fluctuations
World Gold Council's insights on gold demand trends
The Augmont Bullion report from April 30 noted that gold traded near $4,550, at one-month lows. This was amid rising energy costs that fueled inflation concerns and reinforced expectations of further central bank tightening. The World Gold Council's latest Gold Demand Trends report highlights the US-Iran war uncertainty and unresolved Fed direction as factors supporting a structurally higher gold price outlook.
Market influences
Short-term price swings driven by speculative traders
A commodity analyst has said that while the US Federal Reserve and its monetary policy outlook are key focal points for the gold market, external factors like the war in West Asia and its impact on energy prices seem to be more relevant short-term drivers. Carsten Menke, Head of Next Generation Research at Julius Baer, emphasized that speculative traders in paper markets drive short-term price swings rather than safe-haven seekers in physical markets.