From bullion to futures, gold prices witnessed a sharp fall across all markets on July 10. In the Indian market, the price of 10 grams of gold fell by ₹800 on Multi Commodity Exchange (MCX). The shine of this yellow metal has faded not only in India but also in the international markets. The main reasons behind this huge fall are the increasing tension between America and Iran, rising prices of crude oil and the strict policies of the US Federal Reserve.
** Situation worsened due to rise in crude oil **
In recent times, geopolitical tension between America and Iran has increased significantly. Due to this impasse, there has been a sudden and huge surge in the prices of crude oil in the global market. Whenever crude oil becomes expensive, the US central bank – the Federal Reserve – has to raise interest rates to control inflation. A basic principle of economics states that when interest rates rise, gold becomes less attractive to investors. This is why gold, which had seen a tremendous rise last week, came under pressure this week and recorded an overall decline of 1.4%.
**Great buying opportunity amid decline?**
According to market experts, this fall in prices could be an opportunity for investors. Tim Waterer, chief market analyst at KCM Trade, says that after the rally on July 9, the market is currently going through a period of ‘consolidation’ (stability). The US-Iran tension has created an environment of uncertainty, due to which traders are hesitant to invest right now. If crude oil prices remain stable at current levels, investors may make heavy purchases at these low prices. However, if crude oil prices rise further, inflation fears could push gold prices further down.
**Tension increased due to US Fed’s tough stance**
Another reason for concern for gold investors has emerged from America. Recently, the minutes of the June meeting of the Federal Reserve were released, which clearly show that the US central bank is very concerned about the high level of inflation. This means that the Federal Reserve is unwilling to lower interest rates in the near future; Instead, he may adopt stricter policies. If this happens, a continuous decline in gold prices may be seen. Due to this, the spot price of gold in the international market fell 0.1% to $4,115.79 an ounce. At the same time, US gold futures for August delivery fell 0.4% to $4,124.90 an ounce. In India too, gold futures on MCX are trading at ₹1,44,500 per 10 grams, showing a decline of 0.55% (₹800).
**HSBC reduced estimates**
In view of these global conditions, HSBC, one of the world’s largest banks, has changed its estimates for the future prices of gold. The bank has significantly reduced its previous estimates, citing the strength of the dollar and the Federal Reserve’s tightening policies.
According to the new report, the average price of gold for 2026 is now estimated at $4,560 per ounce, down from the earlier estimate of $4,864. Similarly, the estimate for 2027 has been reduced by $5,000 to $4,925 per ounce. HSBC believes that gold prices will fluctuate in the range of $3,800 to $4,700 an ounce for the rest of the year. However, it may reach $4,750 per ounce by the end of the year and $5,025 per ounce by the end of next year.
