Easing US-Iran Tensions Buoys Gold Demand Ahead of Festive Season

Gold prices may see an increase in demand due to easing tensions between the US and Iran. The pause in hostilities has cooled gold prices, making it a good time for buyers to enter the market ahead of the festive season.

Colin Shah, Managing Director of Kama Jewelry, said that the de-escalation in geopolitical tensions has reduced the risk premium in gold prices. He believes this is an opportunity for buyers who had been waiting on the sidelines to make a purchase.

Shah expects consumers to opt for lightweight jewelry during the upcoming festive season as they remain value-conscious and cautious amid recent volatility in gold prices.

Manav Modi, Commodities Analyst at Motilal Oswal Financial Services, noted that gold prices are supported by a weaker US dollar despite easing geopolitical tensions. He pointed out that investors are now focused on the US Federal Reserve's policy meeting later this week, which will closely watch the central bank's commentary on the future rate path and inflation outlook.