Gold under pressure: What’s behind West Asia tensions & PM Modi’s remarks?

Gold prices eased on Monday after last week’s rally as renewed tensions in West Asia, elevated crude oil prices, and a stronger dollar weighed on bullion sentiment, while analysts said Prime Minister Narendra Modi’s appeal to avoid non-essential gold purchases for a year may temporarily dent retail sentiment but is unlikely to alter India’s long-term demand outlook.

COMEX gold traded near the $4,655-$4,700 per ounce range, while silver hovered around $79-$81 per ounce as investors assessed geopolitical developments surrounding the US-Iran conflict and the possibility of prolonged volatility in oil markets.

According to Gaurav Garg, research analyst at Lemonn Markets Desk, gold prices declined as rising geopolitical tensions and the recent jump in crude oil prices intensified inflation concerns. He noted that silver remained relatively resilient due to steady retail demand ahead of the wedding season, while crude oil surged after US President Donald Trump rejected Iran’s response to a US-backed proposal, heightening fears around the ongoing West Asia conflict.

Geopolitical tensions, Fed outlook in focus

Bullion markets turned cautious after optimism surrounding US-Iran negotiations weakened. Manav Modi, commodities analyst at Motilal Oswal Financial Services, said gold prices came under pressure from a firm dollar and elevated oil prices after Trump termed Tehran’s counteroffer “totally unacceptable”, reviving concerns over prolonged tensions around the Strait of Hormuz.

Kaynat Chainwala, AVP - Commodity Research at Kotak Securities, said bullion had largely shrugged off strong US jobs data last week as hopes of easing geopolitical tensions and a weaker dollar supported prices. However, renewed tensions have once again shifted markets into a risk-off mode. She expects COMEX gold to remain in the $4,400-$4,800 range in the near term, while silver may trade between $70 and $85 per ounce. Renisha Chainani, Head of Research at Augmont, said gold and silver had tested the upper end of their recent trading ranges and could now witness profit-booking pressure. She said gold may consolidate within the $4,500-$4,750 range, while silver could trade between $71 and $82. Prithviraj Kothari, Managing Director at RiddiSiddhi Bullions Ltd and President of the India Bullion and Jewellers Association, also said bullion prices are likely to witness consolidation after last week’s rally, with gold expected to trade between $4,550 and $4,750.

Higher-for-longer rates cap upside

Several analysts pointed to the growing influence of US interest rate expectations, bond yields, and dollar movement on bullion prices.

Virat Jagad, Senior Technical Research Analyst at Bonanza, said gold is facing pressure from a strong dollar, rising bond yields, and delayed expectations of US Federal Reserve rate cuts. He added that the recent correction appears to be part of a broader consolidation phase within a longer-term bullish trend.

Ruchit Thakur, Market Analyst at VT Markets, said gold is currently caught in a “macro tug-of-war” between safe-haven demand arising from geopolitical tensions and pressure from higher real yields, a stronger dollar, and expectations that US interest rates may remain elevated for longer.

Deveya Gaglani, Senior Research Analyst - Commodities at Axis Direct, said elevated crude oil prices and stronger-than-expected US non-farm payroll data have reduced the short-term appeal of precious metals. She added that gold prices may remain range-bound, with strong support around ₹1,48,000 on MCX.

N S Ramaswamy, Head of Commodity & CRM at Ventura, said higher interest rates and tighter financial conditions continue to act as near-term headwinds for gold, although weakening US dollar trends and persistent central bank buying remain supportive for the metal over the longer term.

PM Modi’s appeal unlikely to alter long-term demand

Prime Minister Modi’s call to postpone non-essential gold purchases for a year also remained in focus, especially as India battles elevated crude oil prices and pressure on the current account deficit.

Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities, said the appeal should be viewed as an effort to preserve macroeconomic stability and manage imports during a period of global uncertainty. He added that while discretionary jewellery purchases could slow temporarily, long-term Indian gold demand is unlikely to weaken because of the metal’s cultural and investment significance.

Ramaswamy said the appeal appears primarily targeted at physical gold consumption and may encourage investors to shift toward financialised alternatives such as Gold ETFs and Electronic Gold Receipts (EGRs). He added that retail investors continue to view corrections as buying opportunities.

Kothari said India’s record gold import bill has increased pressure on the country’s external balances and suggested that recycling idle household gold and shifting toward digital gold products could reduce dependence on imports.

Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments, described the Prime Minister’s appeal as a short-term austerity strategy linked to elevated crude oil prices and the West Asia conflict. He said gold demand related to weddings and customs is unlikely to disappear, although investment demand may soften temporarily.

Industrial metals remain under pressure

Analysts also flagged continued volatility in industrial metals amid concerns over global growth and geopolitical uncertainty.

Chainani said copper, aluminium, and zinc could remain sensitive to geopolitical developments and any disruption linked to the Hormuz region. She added that aluminium prices are also being supported by supply disruptions and rising energy costs.

Ramaswamy said copper remains one of the strongest long-term opportunities due to growing demand from electric vehicles, AI data centres, and renewable energy infrastructure, while silver continues to benefit from both safe-haven demand and industrial usage in electronics and solar panels.

Market participants are now closely watching US inflation data, retail sales figures, Federal Reserve commentary, crude oil prices, and further geopolitical developments for directional cues in bullion and commodity markets this week.

Published on May 11, 2026