Gold prices rebounded as easing geopolitical tensions in the Middle East and a weaker US dollar lifted demand for the precious metal. However, with domestic prices still a little over ₹18,000 away from their record high, investors are increasingly wondering whether gold could climb toward ₹2 lakh per 10 grams in the coming months.
On the MCX, gold prices rose to an intraday high of ₹₹1,61,675 per 10 grams on Tuesday. At current levels, the yellow metal is down over ₹18,000 from the lifetime high of ₹1,80,779.
The rally in bullion came after comments from US President Donald Trump suggested that the conflict with Iran could end sooner than expected. The easing of geopolitical tensions weakened the US dollar and pushed oil prices lower, which is supportive for gold prices.
A weaker dollar makes gold cheaper for investors holding other currencies, while lower oil prices reduce fears of a war-driven surge in inflation. Reduced inflation risks can also lessen the likelihood of central banks raising interest rates, a positive factor for non-yielding assets such as gold.
In the international markets, COMEX gold futures for April delivery rose $75.91, or 1.5%, to $5,179.61 per ounce, while spot gold gained 0.7% to $5,174.49 per ounce. US gold futures also climbed 1.6% to around $5,184.
Earlier in the week, gold prices had dropped nearly 2% as a sharp surge in oil prices stoked inflation fears and raised doubts about the possibility of a near-term rate cut by the US Federal Reserve.
Gold rate today: Can gold hit? ₹2 lakh?
Market experts say that while gold remains fundamentally strong, the near-term outlook could involve consolidation rather than an immediate breakout to new highs.
According to Renisha Chainani, Head of Research at Augmont, easing geopolitical tensions could temporarily cap the rally in bullion.
“War-related uncertainty typically drives safe-haven demand, and any signs of de-escalation reduce the risk premium embedded in prices. As tensions ease, investors often rotate back to risk assets, which can lead to consolidation or mild corrections in bullion.” Therefore, while ₹2 lakh is possible in the longer term, the near-term outlook is more likely to be consolidation and rangebound momentum before the next leg higher, she added.
Chainani further noted that the broader long-term drivers for gold remain intact, including high global debt levels, expectations of monetary easing, and continued geopolitical risks. She noted that central banks have also been diversifying reserves away from the US dollar, which continues to support gold demand.
In the near term, she expects prices to remain supported but move within a range before attempting another leg higher.
“Gold continues to maintain a bullish bias, with prices expected to move towards $5250 (~ ₹165,000) and $5300 (~ ₹167,000) in the near term. Strong support is seen around the $5000 (~ ₹158,500) level.”
Other analysts also believe that while short-term fluctuations may continue, structural factors remain supportive for gold over the longer term.
According to NS Ramaswamy, Head of Commodity & CRM at Ventura, gold has remained resilient despite rising bond yields, which typically weigh on bullion prices.
“Gold has been able to hold its ground relatively well despite rising or elevated yi bondelds. In the longer term, structural factors such as continued central bank gold purchases, persistent geopolitical uncertainties and high global debt levels support the broader bullish outlook for gold.”
Ramaswamy said the inflationary impact of the conflict could prompt a more hawkish stance from global central banks, which might limit the pace of the rally in the near term. However, if geopolitical tensions ease and the US dollar weakens, gold could regain upward momentum.
He added that over the longer term, gold prices in international markets could potentially surpass $5,600 per ounce, which could translate into domestic prices approaching ₹₹2 lakh per 10 grams if supportive macro conditions persist.
For now, analysts say the key factors that will determine gold’s next move include the trajectory of the US dollar, global interest rates, and the evolution of geopolitical tensions in the Middle East.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
