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Gold prices had already rallied strongly through late 2025 and early 2026, which means a large part of the geopolitical risk premium may already be reflected in current prices.
Gold prices have been moving in a narrow range amid profit booking, despite US-Israel’s strikes on Iran.
In periods of geopolitical conflict, gold usually rallies as investors move towards safe-haven assets. However, despite escalating tensions involving the US, Israel and Iran this week, the yellow metal has not seen a sharp breakout.
Instead, gold prices have been moving in a narrow range as several countervailing factors limit further gains.
Profit booking after recent rally
Gold prices had already rallied strongly through late 2025 and early 2026, which means a large part of the geopolitical risk premium may already be reflected in current prices.
As a result, traders are using spikes triggered by war headlines to book profits rather than build fresh long positions.
During Thursday’s session, MCX gold briefly touched an intraday high of around Rs 1,63,142 before retreating towards the Rs 1,61,600 level amid profit booking.
Interest rates, other factors
Another key factor restraining gold is the likelihood of high interest-rate environment globally amid geopolitical uncertainties. Gold does not generate any income, unlike bonds or deposits.
With major central banks keeping interest rates elevated to tackle inflation, investors are increasingly allocating funds to fixed-income assets that offer attractive yields.
Jateen Trivedi, vice-president (research analyst-commodity and currency) of LKP Securities, said, “Gold prices traded in a sideways and volatile range between Rs 1,60,000 and Rs 1,63,000 as CME gold hovered near the $5,150 level, reflecting cautious positioning by participants. Market focus now shifts to key U.S. data releases, with Initial Jobless Claims due later today and the more critical Unemployment Rate and Nonfarm Payrolls numbers scheduled for tomorrow. These data points will play an important role in shaping expectations around the Federal Reserve’s interest rate outlook and could drive the next directional move in gold prices.”
Strong resistance near $5,200
In international markets, gold is hovering close to the $5,100–$5,200 range, which analysts see as a major technical resistance zone.
According to Geojit Research, strong buying interest is emerging near the $5,100 level, providing support to prices. However, a decisive break above $5,200 may require a much stronger trigger than the current geopolitical developments.
Until such a catalyst emerges, gold is likely to consolidate within this range.
Outlook
Despite the lack of a sharp rally, gold continues to remain an important hedge during periods of uncertainty. The World Gold Council has maintained that gold remains a key crisis hedge for investors.
For now, geopolitical tensions appear to be preventing any sharp decline in prices.
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March 05, 2026, 16:13 IST
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