Gold prices on MCX edged higher on Monday, May 25, with June futures rising Rs 456 or 0.29% to Rs 1,59,135 per 10 grams in early trade, recovering part of last week’s sharp correction amid improving sentiment around a possible US-Iran agreement.
International gold prices also moved higher toward $4,600 an ounce as markets reacted to reports suggesting progress in negotiations between the United States and Iran. The proposed agreement could potentially reopen the Strait of Hormuz, reduce regional hostilities, release frozen Iranian assets, and initiate further talks focused on Tehran’s nuclear program.
However, uncertainty around the situation continues after US President Donald Trump stated that the blockade of the Strait of Hormuz would remain in place until a formal agreement is fully finalized.
Despite Monday’s rebound, gold prices remain nearly 13% lower compared to levels seen before the Middle East conflict escalated. The earlier decline was triggered by fears that rising energy prices could fuel global inflation and force central banks to maintain higher interest rates for a longer period.
Investors are also closely monitoring signals from the US Federal Reserve. Fed Governor Christopher Waller recently indicated that he no longer believes the central bank should maintain an easing bias in its monetary policy stance, adding pressure on expectations around future rate cuts.
On MCX, gold futures witnessed short covering activity during early trade, with traders balancing geopolitical developments, crude oil movement, inflation risks, and the outlook for global monetary policy.
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