Spot gold gained 0.4% to $4,055.76 an ounce in early trade on Monday, while crude oil prices slumped by more than 5% after US President Donald Trump decided to hold off fresh military strikes against Iran, according to The Times of India. US gold futures climbed 0.9% to $4,054.00 as hopes of a diplomatic breakthrough eased concerns over inflation and higher interest rates.
Trump delays Iran strike, oil slides
The Times of India reported that Trump said talks with Iran would take place on Monday but declined to set a deadline for reaching an agreement. The prospect of negotiations pushed oil prices down by more than 5%, easing fears of a prolonged supply disruption. Oil prices tumbled more than 6% on Monday, erasing part of last month's rally, though uncertainty over the negotiations and persistent security risks along key shipping routes has kept investors on edge.
Oil prices: WTI and Brent levels
As of 7:10 am, WTI crude was down 4.75% at $80.65 a barrel, while Brent crude fell 4.40% to $84.06 a barrel, The Times of India reported. Any further escalation in the Middle East could affect crude oil supplies through key shipping routes, and investors closely tracked tensions in the US-Iran conflict.
| Commodity | Contract / Reference | Price | Change |
|---|---|---|---|
| Spot gold | Global spot | $4,055.76/oz | +0.4% |
| US gold futures | COMEX | $4,054.00/oz | +0.9% |
| Gold futures | MCX October delivery | Rs 1,44,022/10g | -Rs 818 (-0.56%) |
| Gold futures | New York | $4,075/oz | -0.69% |
| WTI crude | NYMEX | $80.65/bbl | -4.75% |
| Brent crude | ICE | $84.06/bbl | -4.40% |
Rupee strength and gold's physical demand
The rupee surged 31 paise to 95.12 against the US dollar in early trade on Monday, helped by the steep fall in crude oil prices, a softer greenback, FII inflows, a rise in India's forex reserves and Reserve Bank of India (RBI) support, according to forex traders cited by The Times of India. The dollar weakened after authorities intervened in the foreign exchange market to support the Japanese yen, making dollar-denominated gold cheaper for overseas buyers.
On the physical demand side, gold futures on the Multi Commodity Exchange (MCX) for October delivery declined Rs 818, or 0.56%, to Rs 1,44,022 per 10 grams, with a business turnover of 683 lots, The Times of India reported. Analysts attributed the decline to softer demand in the physical market, according to Reuters. In the global market, gold futures were trading 0.69% lower at $4,075 per ounce in New York.
Gold outlook after the US-Iran conflict
Gold has remained under pressure since the outbreak of the US-Iran conflict, as higher oil prices could fuel inflation and prompt central banks to keep interest rates elevated, according to The Times of India. With talks between the US and Iran scheduled for Monday and no deadline set, the report said investors closely tracked Middle East tensions, as any further escalation could affect crude oil supplies through key shipping routes. Uncertainty over the negotiations and persistent security risks along key shipping routes has kept investors on edge.
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