Gold prices climbed more than 1% on Monday, supported by weakness in the US dollar and softer crude oil prices, as investors closely monitored the possibility of progress in peace negotiations between the United States and Iran. Spot gold advanced 1.4% to $4,570.88 per ounce by 0045 GMT, while US gold futures for June delivery gained 1.1% to reach $4,572.90.
Silver and Other Precious Metals Rally
Spot silver surged 3.9% to $78.42 per ounce, platinum gained 1.9% to $1,959.85, and palladium also rose 1.9% to $1,373.25. In India, gold continued to trade at a steep discount last week as volatility in prices affected demand, while premiums in China eased. Gold speculators reduced their net long positions by 6,239 contracts to 94,388 during the week ending May 19.
Dollar Weakens, Oil Drops
The decline in the dollar made gold priced in the greenback cheaper for buyers using other currencies, supporting demand for bullion. US President Donald Trump said on Sunday that he had instructed his representatives not to hurry negotiations with Iran, as his administration attempted to tone down expectations of an immediate breakthrough in the conflict that has continued for the past three months. A day earlier, Trump had stated that Washington and Tehran had largely negotiated a memorandum of understanding related to a potential peace agreement that could reopen the Strait of Hormuz. Oil prices fell to their lowest levels in two weeks on Monday amid optimism that the United States and Iran were moving closer to a peace deal, although major differences between the two sides still remain unresolved.
Gold Likely to Trade Sideways
Pranav Mer, Vice President, EBG - Commodity & Currency Research, JM Financial Services said gold is expected to remain largely sideways this week, while silver may continue to show strength as market attention stays focused on US-Iran peace discussions aimed at ending the conflict. Mer said gold prices remained largely range-bound over the past few sessions and ended the week with slight losses due to the absence of strong directional triggers from either the economic front or developments related to the US-Iran conflict. He added that crude oil prices continued to remain volatile because of inconsistent and frequently changing statements from both US and Iranian officials.
Gold Round-Up from Last Week
Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities said gold traded within a narrow range last week and recorded modest gains of nearly 0.40% on the MCX, settling close to Rs 1,58,670 per 10 grams. He noted that crude oil witnessed sharp profit booking during the week, with prices correcting nearly 7% from recent highs, which helped ease some global inflation concerns. Trivedi also pointed out that the rupee recovered from weaker levels near 97 against the US dollar to strengthen around 95.70, limiting the upside in domestic gold prices despite relatively stable global bullion trends. In international markets, Comex gold futures declined 1% for the week to close at $4,523.2 per ounce, while silver futures fell almost 2% to settle at $76.20 per ounce.
On the Multi Commodity Exchange (MCX), gold futures ended the previous week with marginal gains at around Rs 1.58 lakh per 10 grams, while silver futures closed slightly lower at Rs 2.71 lakh per kilogram. Domestic commodity futures markets will remain shut during the morning trading session on Thursday on account of Bakri Id. Meanwhile, US President Donald Trump said on Sunday that Washington and Tehran were close to reaching a broad agreement aimed at reducing tensions in the Gulf region and reopening the Strait of Hormuz. In a post on Truth Social, Trump claimed that the agreement had been largely negotiated and that only final details remained before an official announcement.
Investors will also closely watch key US economic indicators including housing data, GDP figures, consumer confidence numbers, and Personal Consumption Expenditure (PCE) inflation data for further signals regarding the Federal Reserve's future policy direction. Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India.
