Gold futures fall 0.35% to Rs 1.58 lakh as US‑Iran tensions and Fed

Gold futures on the Multi Commodity Exchange fell Rs 562, or 0.35%, to Rs 1,58,784 per 10 grams, while U.S. Comex August contracts dropped nearly 1% to $4,482.30 per ounce, as fresh US‑Iran missile exchanges lifted oil prices and heightened expectations of further Federal Reserve rate hikes【1】.

Geopolitical trigger and commodity spill‑over

The price drop coincided with a new round of missile and drone strikes between the United States and Iran, after the U.S. Central Command reported targeting an unladen tanker bound for Iran’s Kharg Island. Iran’s retaliatory strikes on Kuwait and Bahrain followed, pushing Brent crude up 2.22% to $98.13 per barrel【1】. Higher oil prices stoke inflation concerns, which analysts say diminish gold’s safe‑haven appeal as traders price in the likelihood of tighter monetary policy【1】.

Fed outlook and market sentiment

U.S. job‑openings data for April rose unexpectedly, reinforcing expectations that the Federal Reserve may keep rates higher for longer. In the Indian market, a stronger dollar and the CME FedWatch tool showing a 65% chance of a September rate increase added pressure on non‑yielding assets like gold【2】. Spot gold in New York fell to $4,031.29 per ounce after briefly touching a seven‑month low, and domestic spot gold slipped to Rs 1,45,800 per 10 g, down Rs 800 from the prior close【2】.

What to watch

• U.S. non‑farm payrolls and ADP employment reports later this week, which could sharpen Fed rate‑hike expectations.
• Any further escalation or de‑escalation in the US‑Iran conflict, especially potential talks in Doha, which may move oil prices and gold sentiment.
• The CME FedWatch probability for a September rate hike, currently around 65%; a shift above or below 50% could trigger additional moves in gold and the rupee‑denominated market.

The twin pressures of geopolitical risk and a tightening U.S. monetary stance have left gold vulnerable, underscoring how quickly safe‑haven demand can evaporate when inflation‑driven rate concerns dominate market narratives.