US Dollar Strength and Inflation Fears May Lower India’s Gold Price to ₹1.27 Lakh
Global gold markets experienced a sharp sell-off last week amid a resilient U.S. dollar and rising inflation concerns tied to higher oil prices. MCX gold fell from levels near ₹1,60,000 at the start of the US‑Iran conflict to close at ₹1,44,825 per 10 gm. COMEX gold settled at $4,574.90 per troy ounce.
Macro drivers and geopolitical risks
Analysts point to a mix of geopolitics and monetary policy uncertainty. The escalation in the US‑Iran conflict and strikes on energy infrastructure raised energy risk premiums.
Sugandha Sachdeva, founder of SS WealthStreet, said higher crude prices are feeding imported inflation. She noted the impact on fuel and logistics costs globally.
Central bank stance and market reaction
Major central banks signalled a cautious to hawkish tone last week. The U.S. Federal Reserve, Bank of Japan, Bank of Canada, and Bank of England all shifted rate expectations.
Anuj Gupta, a SEBI‑registered market expert, said markets now look at higher‑for‑longer rates rather than quick cuts. That view has reduced gold’s safe‑haven bid.
Interest rates and inflation dynamics
Rising crude oil is expected to keep inflation elevated. Higher inflation would force central banks to hold rates steady or raise them further.
Such outcomes increase bond yields and strengthen the dollar. Those forces weigh on bullion prices.
Dollar strength, oil and liquidity effects
The U.S. dollar index rallied from about 95.50 to above 100 in recent weeks. A stronger dollar and rising U.S. yields pressured gold despite geopolitical turmoil.
Analysts also point to margin calls and liquidity‑driven selling. These moves triggered long liquidations in gold markets.
Near‑term technical outlook and price targets
Market strategists expect the downtrend to continue unless key resistance is reclaimed. Jateen Trivedi of LKP Securities said sentiment remains weak.
The near‑term domestic trading band is seen between ₹1,40,000 and ₹1,47,000 per 10 gm. Downside targets include ₹1,35,000 and ₹1,27,000 per 10 gm.
| Instrument | Recent close | Near-term downside |
| MCX gold (per 10 gm) | ₹1,44,825 | ₹1,27,000 |
| COMEX gold (per oz) | $4,574.90 | $4,250 |
Resistance levels to watch
On the international front, analysts cite resistance in the $5,420–$5,450 per ounce zone. A sustained move above $5,280 is seen as needed to restore an uptrend.
For MCX, resistance sits near ₹1,70,000, with ₹1,65,000 as a key near‑term pivot. Prices below these levels keep the bias corrective.
US Dollar Strength and Inflation Fears are central to the outlook. Persistent Inflation Fears and US Dollar Strength may influence India’s Gold Price, possibly pushing India’s gold price toward ₹1.27 Lakh in a downside scenario.
Filmogaz.com compiled the expert views and price data above for readers. This article is informational and not investment advice.
