Yet, expectations of fewer rate cuts from the US Federal Reserve are acting as a lid on further gains.
Here’s a breakdown of why gold prices are rising and what’s keeping them in check.
What’s driving gold prices up?
Middle East conflict
Investors tend to turn to gold in times of war or global tension. The ongoing hostilities between Israel and Iran, along with the US military repositioning aircraft and ships in the Middle East, are spooking markets.
“Gold has made a modest bounce as we await the next steps in the Israel-Iran conflict. If the US gets directly involved, the geopolitical stakes could rise sharply,” said Tim Waterer, Chief Market Analyst at KCM Trade.
People in Tehran are reportedly leaving the city amid growing fears of airstrikes. Any escalation can drive more investors to gold as a ‘safe asset’.
Global uncertainty
From war risks to tariff hikes and sticky inflation, investors are facing a complex economic outlook. In such scenarios, gold tends to be seen as a stable store of value.
“If the conflict escalates further, we expect flows to move to gold on the back of safe-haven demand,” said Jahangir Aziz, Global Head of Emerging Markets Economics at JPMorgan.
What’s limiting the upside?
Fed holds off on rate cuts
The US Federal Reserve has kept interest rates steady at 4.25%–4.50% and signaled a slower pace of rate cuts ahead. That has made the dollar slightly more attractive and capped gold’s gains.
“The Fed was not as dovish as some had hoped. Powell sounded slightly hawkish. That’s why gold’s rally has been limited,” said Matt Simpson, Senior Analyst at City Index.
Higher interest rates make gold less attractive compared to interest-earning assets like bonds.
Technical resistance
Gold faces resistance near $3,400 an ounce globally, and around ₹1,00,240 per 10g in India. It needs a stronger trigger — such as major escalation or sudden economic shocks — to break higher.
How is gold faring in India?
As of June 19:
- 24K gold: ₹1,01,080 per 10g
- 22K gold: ₹92,650 per 10g
- 18K gold: ₹75,810 per 10g
(Source: Goodreturns)
These prices remain steady, supported by international trends and rupee stability.
What’s the outlook for gold?
Rahul Kalantri, VP Commodities at Mehta Equities, believes the market remains volatile. “Sticky inflation, sluggish growth, and ongoing global tensions are supporting gold, but the Fed’s hawkish tone is acting as resistance.”
Aksha Kamboj, Vice President at the India Bullion and Jewellers Association, added that unless there’s a major flare-up in global tensions, gold may continue to trade in a narrow range.
“Prices are lacking momentum at higher levels. A ceasefire or peace talks in the Middle East could actually weigh on prices,” she said.
