US-Iran Tensions Ease, Gold Demand in India Expected to Rise
Gold demand in India is expected to increase due to the easing of US-Iran tensions, which has cooled gold prices and reduced volatility. This development has encouraged consumers who delayed purchases to return to the market ahead of the festive and wedding season, according to industry experts.
Colin Shah, Managing Director of Kama Jewelry, stated that the de-escalation in geopolitical tensions has eased the risk premium in gold prices, creating an opportunity for buyers. He noted that softer prices are expected to help clear inventories before the festive season.
Shah added that consumers will likely remain value-conscious and opt for lightweight plain and studded jewelry amid recent volatility in gold prices driven by geopolitical developments. This cautious approach is due to the recent decline in crude oil prices, which has eased immediate concerns over supply disruptions through the Strait of Hormuz and the Red Sea.
Manav Modi, Commodities Analyst at Motilal Oswal Financial Services, said that gold prices remain supported by a weaker US dollar despite easing geopolitical tensions. He noted that investors will closely watch the US Federal Reserve's policy meeting later this week, where interest rates are expected to remain unchanged but markets will scrutinize the central bank's commentary on future rate path and inflation outlook.