What’s the story
Gold prices have witnessed a steep fall of over 9% since the onset of the US-Iran war on February 28.
The decline comes as peace talks between the two nations ended without a deal.
Market analysts are predicting further near-term downside in gold prices amid rising geopolitical tensions and failed ceasefire negotiations.
Gold prices remained stable on Friday
Despite the ongoing conflict, gold prices remained stable on Friday. The spot gold was trading at $4,761.79 per ounce, while the US gold futures settled 0.6% lower to hit $4,787.40.
Geopolitical tensions may lead to gold prices gap-down opening
Anuj Gupta, a SEBI Registered Research Analyst, has predicted that gold could see a flat to gap-down opening if geopolitical tensions escalate further.
He also said that the ongoing US-Iran war could support crude oil prices.
Gupta added that gold might see some profit booking or mild correction amid expectations of tighter monetary policy by central banks in response to persistent inflation.
US data signals slowing economy
Gupta also said that the recent run of weaker-than-expected US data signals a slowing economy. This should help limit any sharp downside and provide underlying support to prices. “In the near term, gold is expected to trade in range of $4,650 to $4,800,” he said.
Selective buy-on-dips strategy near key support levels recommended
Ponmudi R, CEO of Enrich Money, said the market sentiment remains cautiously optimistic with a selective buy-on-dips strategy near key support levels.
He also noted that volatility is likely to continue amid the evolving global landscape and geopolitical developments.
On the technical outlook, Ponmudi said COMEX Gold is trading around $4,750-$4,800 after a steady recovery from last month’s sharp decline.