Bearish for Gold: US-Iran Tensions Hit Precious Metals, OMCs; ONGC

Gold and silver prices have fallen by up to 2% globally following fresh US military strikes on Iran. This geopolitical escalation has driven up crude oil prices, intensifying inflation concerns and potentially delaying interest rate cuts by central banks. Investors are now closely watching US PCE data for further cues on the Federal Reserve's monetary policy.

For the Indian market, rising global crude oil prices directly impact inflation and the current account deficit, potentially weakening the INR. This could influence the RBI's monetary policy stance, making rate cuts less likely. Furthermore, a global risk-off sentiment often leads to FII outflows from emerging markets like India, affecting broader market liquidity and sentiment.

Indian jewelry retailers and manufacturers like TITAN, PCJEWELLER, and RAJESHEXPO face negative sentiment due to falling gold prices impacting inventory and sales. Oil Marketing Companies (OMCs) such as IOC, BPCL, and HPCL are negatively impacted by rising crude oil input costs, which can squeeze their marketing margins. Conversely, upstream oil producers like ONGC and the E&P segment of RELIANCE could see positive impacts from higher crude realizations.

Traders should monitor the geopolitical situation in the Middle East for further escalation or de-escalation, as well as global crude oil price movements. The upcoming US PCE data release will be crucial for understanding the Federal Reserve's interest rate trajectory, which will, in turn, influence global liquidity and FII flows into India. Watch for any statements from the RBI regarding inflation and monetary policy.

• •Gold prices declined on Thursday.
• •U.S. strikes on Iran boosted oil and fueled inflation concerns.
• •Inflation concerns impact interest rate outlooks.
• •Spot gold fell 0.8% to $4,419.60 per ounce.
• •Investors await U.S. PCE data for Federal Reserve policy signals.