Gold prices experienced a notable surge on Monday, with June futures climbing ₹426 to ₹1,59,105 per 10 grams on the Multi Commodity Exchange, representing a 0.27% increase. According to The Hindu BusinessLine, the precious metal traded with a business turnover of 5,312 lots, driven by optimism surrounding a potential US-Iran peace agreement. In international markets, Comex gold futures for June rose nearly 1% to $4,590.62 per ounce in New York trading. The latest gains build on the previous consolidation near the ₹1.58 lakh–₹1.59 lakh zone, with prices now showing stronger momentum following the latest developments. However, ICICI Bank's Economic Research Group warns that gold prices may remain under pressure in the near term amid ongoing West Asia conflict and a stronger US dollar, with the metal having corrected nearly 15% since the conflict began on February 28, 2026.
The primary driver behind gold's latest surge was optimism surrounding a potential US-Iran peace agreement, as reported by The Hindu BusinessLine. US President Donald Trump announced on Sunday that the framework for a peace deal with Iran was "largely negotiated," with reports indicating the proposed agreement could extend the existing ceasefire and reopen shipping routes through the Strait of Hormuz. However, Trump later clarified there was "no hurry" to finalise the agreement and confirmed the US naval blockade against Iran would remain in place for now. Despite progress in negotiations, analysts noted that major differences remain over Tehran's nuclear programme, which Iranian officials have repeatedly rejected. According to ICICI Bank's Economic Research Group, geopolitical tensions in West Asia and the strengthening US dollar continue to weigh on investor sentiment, with the global dollar trajectory emerging as a key factor influencing bullion prices.
Technical indicators continue to support the bullish outlook for gold prices. As reported by The Economic Times, EMA 8 continues to trade above EMA 21, which keeps the short-term trend positive. Prices are also sustaining above both moving averages, indicating dip buying remains active. Bollinger Bands have started flattening after previous expansion, signalling consolidation before the next directional move. The current price action near the middle-to-upper Bollinger range suggests the broader bullish trend remains intact unless major support zones are broken decisively. However, ICICI Bank notes that gold prices have come under sharp selling pressure since the outbreak of the West Asia conflict, with the metal having corrected nearly 15% since the conflict began on February 28, 2026, largely due to the rebound in the US dollar.
According to Gaurav Garg, Research Analyst at Lemonn Markets Desk, as reported by The Hindu BusinessLine, gold prices saw a notable uptick driven primarily by a weaker US dollar and optimism surrounding a potential US-Iran peace deal. The positive sentiment was further bolstered by easing crude oil prices, with WTI crude holding steady at $96.60 per barrel in international markets. Manav Modi, Commodities Analyst at Motilal Oswal Financial Services Ltd, noted that bullion benefited from a sharp decline in the US dollar and Treasury bond yields, while easing concerns over prolonged energy-driven inflation also supported prices. Hopes for de-escalation helped ease fears that surging oil prices could trigger another wave of global inflation. However, ICICI Bank reports that gold prices could slip further towards $4,200 per ounce if tensions in the region escalate again, highlighting the volatility in the current geopolitical environment.
Analysts maintain a positive bias with a buy-on-dips strategy recommendation following the latest price surge. According to Modi, a decisive breakout above immediate resistance could pave the way for another leg of upside in bullion prices in the near term. The current rally represents a significant move from the previous consolidation phase near the ₹1.58 lakh–₹1.59 lakh zone, with technical indicators pointing to sustained bullish momentum. However, ICICI Bank warns that gold prices may remain range-bound in the near term as geopolitical tensions continue to influence market sentiment. The bank expects international gold prices to trade in the range of $4,400 per ounce to $4,600 per ounce in the near term, while noting that structural factors continue to support a bullish long-term outlook despite current headwinds from the West Asia conflict and dollar strength.
