Gold Prices 2026 Fall as US-Iran Tensions Weigh on Global Markets and India’s Jewellery Sector

Several forces weighed on bullion after last year’s surge. Profit taking followed the strong 2025 rally, while the US dollar strengthened. Geopolitics also shifted market pricing. Iran blocked the Strait of Hormuz, which pushed global oil prices sharply higher. That move changed inflation and rate expectations in the US.

Higher energy costs lifted US inflation to 4.2% in June. That was the highest reading in three years. Investors reduced bets on Federal Reserve rate cuts. Markets instead priced in the risk of another rate hike. Gold pays no interest, so higher yields reduced its appeal.

Diplomatic clarity also remained limited, which kept investors unsure. A peace deal between the US and Iran was still not in place. With the outcome unclear, markets stayed sceptical. "Ironically, world leaders, especially from the so-called developed nations, love talking about peace and harmony in every speech they give, but that hasn't stopped them from bombing the infrastructure and humanity of other volatile countries. The situation remains dire, and it is having a cascading effect worldwide."

India gold retail prices versus MCX gold

Retail pricing in India told a different story from MCX Gold. Retail gold rates rose over 7% in 2026 so far. Prices had already jumped over 70% in 2025. The 22k rate stood at Rs 1,32,450 on Jul 8, 2026. It compared with Rs 1,23, 800 in January 2026.

India remained the world’s second-largest gold consumer after China. The jewellery retail market was valued near Rs 7.31 lakh crore ($85 billion) in 2026. It was projected to reach Rs 11.18 lakh crore ($130 billion) by 2030. Weddings, festivals, gifting, and investment drove demand, and India made up about 22% of global jewellery demand.

Large jewellery chains still reported strong revenue growth despite high prices. Tata's Tanishq, Malabar Gold & Diamonds, Joyalukkas, and Kalyan Jewellers cited higher ticket sizes. Store additions also supported sales. These trends helped keep retail prices firm even when global spot prices eased from the peak.

Gold price outlook for 2026 with US spot gold forecasts

The next 6-12 months looked constructive, but volatility was expected to stay high. "Can gold resume its upward trend? The short answer is yes, but it requires a clear catalyst," said Juan Carlos Artigas, global head of research at World Gold Council. "This could come from three primary sources: worsening economic or geopolitical conditions, a reversal in interest-rate expectations, or long-term investor participation.In this context, our macro-based scenario analysis suggests that gold could resume its upward trend around US$4,500/oz, but only a strong, clear signal may push it sustainably towards US$5,000/oz."

Major banks also reduced near-term targets as rate-cut bets cooled. JPMorgan cut its Q4 2026 forecast by about 25% to $4,500 an ounce, from around $6,000. Goldman lowered its year-end target by $500 to $4,900 an ounce. It cited fewer Fed cut expectations and weaker ETF inflows.

Recent gold moves were driven more by global uncertainty than jewellery buying alone. Oil shocks, inflation prints, and rate pricing shifted demand quickly. Indian retail prices stayed supported by local consumption and a large jewellery market. With a US-Iran peace deal still pending, safe-haven demand remained a key swing factor.