Gold prices declined by Rs 853 to Rs 1,62,450 per 10 grams in futures trade on Wednesday, as bearish sentiment in international markets weighed on the yellow metal amid mixed signals over the ongoing conflict in West Asia.

On the Multi Commodity Exchange, April delivery gold fell 0.52 per cent in a business turnover of 7,529 lots. Analysts said the recent gains in bullion prices eased as developments involving the US, Israel and Iran remained uncertain, prompting investors to adopt a cautious approach.

In international markets, gold futures on the Comex for April delivery dropped USD 30.15, or 0.58 per cent, to USD 5,211.95 per ounce.

“Part of the gains faded amid conflicting developments surrounding the ongoing US-Israel conflict with Iran. The evolving geopolitical situation continues to cloud the outlook for US monetary policy, particularly expectations for potential interest rate cuts,” said Manav Modi, Commodities Analyst at Motilal Oswal Financial Services Ltd.

He added that trader positions reflected caution, with holdings in gold-backed exchange traded funds (ETFs) falling sharply. Total holdings fell by nearly 30 tonnes last week, marking the largest weekly outflow in more than two years.

“Despite the outflows, bullion remained supported by safe-haven demand as markets assessed the potential for disruptions in global energy supplies and the possibility of a resolution to the conflict,” Modi said.

ALSO READ | Japan to release oil reserves from March 16 as Strait of Hormuz blockade disrupts supply

Analysts noted that mixed signals on the conflict have created volatile trading conditions. Earlier, US President Donald Trump suggested the conflict could end soon, but continued strikes involving the US, Israel and Iran by early Wednesday indicated little immediate de-escalation, extending the crisis into its 12th consecutive day.

“Investors are closely watching upcoming US inflation data, which could provide fresh cues on the Federal Reserve’s policy outlook and near-term trajectory for precious metals,” said Jigar Trivedi, Senior Research Analyst at IndusInd Securities.

(PTI)