Daijiworld Media Network- Mumbai

Mumbai, Jun 25: After a volatile few weeks driven by heightened geopolitical tensions in the Middle East, gold prices are now showing signs of cooling, with investors shifting focus away from safe-haven assets. The latest ceasefire announcement between Iran and Israel, coupled with global monetary signals, has cast a bearish shadow over the precious metal’s short-term outlook.

Maneesh Sharma, AVP – Commodities & Currencies at Anand Rathi Shares and Stock Brokers, noted that the yellow metal is now adjusting to a new phase of subdued demand. “Gold’s weakening bias may persist in the near term as markets digest the de-escalation in geopolitical risks,” Sharma said.

Global central banks took mixed stances last week, with the US Federal Reserve choosing to hold rates steady while Switzerland and Norway cut rates. Meanwhile, the Bank of England and Bank of Japan adopted a wait-and-watch approach. This divergence, Sharma noted, has created a fragmented view on economic direction, with stagflation concerns still hovering.

Following the military strikes last week, gold surged to a record high on the MCX, buoyed by fears of escalation after Israel’s strike near Iran’s nuclear facilities. However, US President Donald Trump’s announcement on Tuesday of a mutual ceasefire pulled back that momentum. Iran’s immediate compliance, followed by Israel’s agreement, caused gold to erase its gains swiftly.

With attention now turning towards US Federal Reserve Chair Jerome Powell’s testimony before Congress, investors are keen to glean insights into the Fed’s rate stance amidst a data-heavy week. “The market is looking for cues on inflation trajectory and future rate cuts. If Powell remains cautious, gold could face added pressure,” Sharma added.

Despite having touched a record high of over $3,500 per ounce in April in global spot markets, gold now finds itself in a corrective phase. Analysts suggest the metal may continue to consolidate or slip in the first half of July, having already priced in much of the geopolitical premium.

For investors, the mood remains watchful. With the metal entering a consolidation zone, focus will now rest on central bank commentaries and macroeconomic indicators to determine the next significant move.