New Delhi, March 16 Gold prices started the week on a negative note, declining by ₹2,225 to ₹1.56 lakh per 10 grams in the futures trade on Monday amid a bearish sentiment in overseas markets and a strong US dollar.
On the Multi Commodity Exchange, gold futures for April delivery depreciated by ₹2,225, or 1.4 per cent, to ₹1,56,241 per 10 grams in a business turnover of 7,881 lots.
"Gold prices in the domestic market declined on Monday. The drop in precious metals is largely attributed to rising crude oil prices, which surged to over USD 100 per barrel, raising inflation fears and dampening expectations of an interest rate cut by the Federal Reserve," Gaurav Garg, Research Analyst at Lemonn Markets Desk, said.
He added that ongoing geopolitical tensions in West Asia, particularly the conflict involving the US and Iran, have further complicated market sentiments, leading investors to reassess their positions in safe-haven assets.
In the international market, gold futures for the April contract slipped USD 54.31, or 1.07 per cent, to USD 5,007.39 per ounce on the Comex.
"Gold held near USD 5,000 per ounce after falling for two straight weeks, as oil remained volatile after the US attacked Iran's main oil-export hub of Kharg Island over the weekend, heightening global supply risks," Jigar Trivedi, Senior Research Analyst at IndusInd Securities, said.
Meanwhile, the US-Israeli war on Iran has now entered its third week with no clear resolution in sight, rattling financial markets.
"Higher energy prices and mounting inflationary pressures have lowered expectations that the US Federal Reserve and other major central banks will cut interest rates, posing a headwind for non-yielding precious metals," Trivedi said.
The Fed is widely expected to hold its policy rate steady this week, while central banks in the Eurozone, the UK, Japan, Switzerland, Australia, Canada, China, Brazil, and Russia are also set to decide on monetary policy, he added.
