Safe-Haven Dynamics – Gold stabilised near $4,500 after a near 2% decline, weighed down by escalating Middle East tensions that have pushed energy prices sharply higher and stoked inflation fears. The resulting inflationary pressure has reinforced market expectations that central banks will maintain elevated interest rates for an extended period.

Geopolitical Developments – US forces successfully defended against Iranian attacks while escorting two American-flagged vessels through the Strait of Hormuz. The UAE intercepted Iranian cruise missiles and attributed a significant fire at its Fujairah port to an Iranian drone strike. These incidents followed President Trump’s directive to restore safe passage through Hormuz and assist stranded vessels, though shipowners remain cautious given the heightened security environment.

Macro-economic Signals – The renewed escalation has undermined confidence in the four-week ceasefire, triggering a surge in oil prices and global bond yields on expectations of tighter monetary policy ahead. The CME FedWatch Tool indicates the Fed will hold rates steady through 2026, while markets have begun pricing rate hikes for 2027 — the probability of a January 2027 increase has jumped to 22% from near zero just one week prior.

Technical Triggers   

Gold is expected to trade in the range of $4500-$4850 (~ Rs 148,000 -155,000).

Silver is expected to trade in the range of $71-$80 (~ Rs 235,000 -255,000).

Dr.Renisha Chainani, Head- Research, Augmont