Date
Gold rate (₹)
Daily change (₹)
Vs 27 Feb (₹)
01-Apr-26
1,49,432
3,306
-9,153
30-Mar-26
1,46,126
3,782
-12,459
27-Mar-26
1,42,344
-2,439
-16,241
26-Mar-26
1,44,783
0
-13,802
25-Mar-26
1,44,783
4,474
-13,802
24-Mar-26
1,40,309
4,463
-18,276
23-Mar-26
1,35,846
-10,794 🔻
-22,739
20-Mar-26
1,46,640
-778
-11,945
19-Mar-26
1,47,418
-7,179 🔻
-11,167
18-Mar-26
1,54,597
-700
-3,988
17-Mar-26
1,55,297
902
-3,288
16-Mar-26
1,54,395
-3,618
-4,190
13-Mar-26
1,58,013
-1,796
-572
12-Mar-26
1,59,809
-341
1,224
11-Mar-26
1,60,150
459
1,565
10-Mar-26
1,59,691
653
1,106
09-Mar-26
1,59,038
1,071
453
06-Mar-26
1,57,967
-1,911
-618
05-Mar-26
1,59,878
-2,151
1,293
04-Mar-26
1,62,029
0
3,444
03-Mar-26
1,62,029
-5,061 🔻
+3,444
02-Mar-26
1,67,090
+8,505 🔥
+8,505
27-Feb-26
1,58,585
—
0
1. Unwinding of leveraged positions
2. Middle Eastern surplus dry up
3. Inflation fears and liquidity squeeze
The aftermath of these factors
Impact on India
1. Trade balance & inflation
2. Central Bank reserves
What next for gold?
Scenario 1
Scenario 2
Gold is widely seen as a reliable hedge against global political and economic uncertainties. However, during the Iran-Israel conflict , which significantly disrupted global equity and oil markets, gold prices showed abnormal trends. On March 2, the gold spot rate on the Multi Commodity Exchange of India (MCX) jumped sharply by Rs 8,505 to Rs 1,67,090/10g, in the first session after the conflict began on February 28, 2026.Surprisingly, 23 days into the war without any major signs of de-escalation, the price had dropped by Rs 22,739, or 14.34%, from Rs 1,58,585 to Rs 1,35,846.In contrast, as geopolitical tension started to ease with US President Donald Trump giving indications of possible de-escalation and temporary pauses in military action, gold prices started rising. In the last six sessions on MCX, the yellow metal price surged 10% to Rs 1,49,432 as of April 1, 2026.The unusual gold price movement has baffled many investors, Axis Mutual Fund in a report has decoded the uncharacteristic behaviour of the yellow metal’s price. The fund house has also presented two scenarios for the gold outlook.Axis Mutual Fund writes that after a spectacular run-up, gold’s fortunes turned abruptly in the latter part of Q1 2026.By late March (as on March 25, 2026), gold had given up all its year-to-date (2026) gains, falling back to December 2025 levels – roughly $4,100–4,300/oz – a drop of about 20–25% from the peak of January 2026, says Axis Mutual Fund in its report.Axis Mutual Fund gave three primary reasons for a sharp fall of gold prices.Gold’s prior rally had been amplified by investors using leverage – from hedge funds increasing futures positions to retail buyers piling into gold ETFs.However, when the tide turned, these leveraged bets began to unravel. Profit-booking set in, and as prices slipped from their highs, a wave of stop-loss orders was triggered, automated sell orders kicked in, accelerating the decline in a self-reinforcing spiral. Margin calls forced further liquidation as investors sold gold to cover losses in other assets during the concurrent equity market turmoil.The US–Iran conflict, which erupted in late February 2026, disrupted oil shipments from the Persian Gulf, threatening regional stability. The crisis put certain oil-rich states under financial stress: with their oil revenues in jeopardy and rising expenditures, Gulf nations no longer enjoyed large surpluses to invest in gold. Market observers even speculated that some Middle Eastern oil producers might liquidate gold reserves to raise cash, recalling the infamous 1983 scenario when OPEC members sold off gold amid an oil revenue collapse.In mid-March, Fed Chair Jerome Powell signalled that the oil shock was an ‘energy-driven inflation tax’ requiring interest rates to stay higher for longer. Consequently, the US dollar shot up to multi-year highs and the 10-year Treasury yield climbed above 4.35% by late March. The war-induced surge in inflation also raised concerns that global central banks would drain liquidity or delay any easing. Signs of tightening dollar funding appeared (e.g., widening cross-currency swap spreads), reinforcing the view that cash dollars were in high demand. All these factors removed liquidity tailwinds that had buoyed gold and instead created headwinds of strengthened dollar and a resolutely hawkish policy outlook.Axis Mutual Fund’s report says the result was a crash in precious metals by mid-March as gold prices dropped over 10% in a week (its steepest weekly fall since 1983) and silver plunged more than 15% in that same week.“At the same time, a previously supportive trend began to reverse; after two years of accumulation, central banks slowed their gold purchases in early 2026, and gold-backed ETFs saw net outflows for several consecutive weeks,” the Axis Mutual Fund report says explaining the situation.The mutual fund report says as one of the largest gold consumers and importers in the world, India is directly affected by big moves in gold. It highlighted the following points that can impact the Indian economy.When gold prices soar, India’s import bill rises (as the country imports a large portion of its gold consumption). Record high gold prices in 2025 contributed to a wider trade deficit and put upward pressure on inflation – higher bullion costs filtered through to domestic gold and jewellery prices. Indeed, India’s core CPI in late 2025 picked up despite a lower WPI, partly due to costlier gold.The RBI has been part of the global gold buying spree, indicating that policymakers value gold as a strategic asset. It increased its gold reserves in recent years, aligning with the trend of diversifying foreign exchange reserves into gold. The recent price drop does not change that long-term strategy, though it might offer an opportunity for central banks to accumulate gold at slightly lower prices.According to the Axis Mutual Fund report, as of March 24, 2026, gold trades around the mid-$4,000s per ounce, having erased its gains for the year.There are early signs of bargain-hunting: speculative positions have started to build again anticipating a comeback.Axis Mutual Fund further says the outlook for gold prices will depend on how global macro environment evolves.In the near term, much hinges on liquidity, inflation and central banks.Axis Mutual Fund presents two scenarios of the gold price outlook.If inflation remains elevated due to persistent high oil prices, central bankers may keep liquidity tight – bolstering the dollar and yields, which would cap gold’s upside.On the other hand, if oil prices settle down indicating lower inflation risk, it could rekindle expectations of rate cuts, easier liquidity and a weaker dollar: conditions under which gold typically thrives.Moreover, if geopolitical risks intensify to the point of severely undermining global growth (a 'hard landing' scenario), even a hawkish Fed might be forced to pivot, potentially restoring gold’s safe-haven shine.