Gold prices rallied by ₹831 to ₹74,222 per 10 grams on a firm trend globally over the weekend on fear of renewed tension between Iran and Israel after Iran’s President helicopter crash.

This apart, the recent fall in the US inflation rate has raised expectations of a cut in the US interest rate sooner rather than later.

After a trading holiday, the yellow metal opened on a bullish note at ₹74,222 per 10 grams against ₹73,383 logged last Friday, according to the Indian Bullion and Jewellers Association of India data.

Gold prices have been volatile, but so far this month, they have had a bullish undertone, in line with the global trend. They have rallied by ₹2,887 per 10 grams from ₹72,164 registered on May 2.

Meanwhile, after hitting a new high of $2,450 an ounce, gold retreated to $2,410 on Tuesday as commentary from central bank policymakers around the globe reveals a reluctance to commit to lowering interest rates.

Jateen Trivedi, VP Research Analyst, LKP Securities, said gold prices have reacted positively in recent days on hopes of a US interest rate cut following a drop in inflation. This shift has led to speculation that the Federal Reserve might cut rates starting in September.

Gold prices have given up some of the gains on Tuesday as the tension over the Iran-Iraq conflict eased after no definitive cause emerged for Iran’s President’s helicopter crash, he said

Price outlook

Gold is expected to remain volatile, with prices likely to range between ₹71,000 and ₹75,000 in the near term, he added.

Aamir Makda, Commodity and Currency Analyst at Choice Broking, said gold has continued its bullish momentum for the third consecutive month due to central banks purchases of gold as a safe-haven asset.

“We anticipate an increase in demand for paper gold in the coming months as a result of economic instability caused by recessions, global geopolitical concerns and market volatility. India’s gold imports are set to drop 90% in March, reaching their lowest level since the COVID pandemic, as banks cut imports due to record-high prices,” he said.

Steep rally

Amit Goel, Chief Global Strategist at Pace360 said gold has risen by almost 30 per cent since last October and that the rally over last three months has been quite extended.

“We expect gold to fall over the next six months and it may be a good idea to postpone investment for a few months. Demand for paper gold to climb in India as gold will emerge as a very important asset class over the next five years,” he added.

Silver prices

Silver prices zoomed by ₹6,500 to ₹92,873 per kg against ₹86,373 recorded last Friday on firm industrial demand. It has rallied by ₹13,154 per kg so far this month.