Gold and Silver Remain Steady Amid Geopolitical Uncertainty
Gold prices remained largely unchanged on Tuesday as investors carefully assessed the economic implications of escalating tensions in the Middle East, even as peace negotiations between the United States and Iran showed little progress. Geopolitical developments continue to dominate sentiment.
Fresh hostilities were reported on Monday, with both Washington and Tehran launching attacks in the Gulf region as they sought to assert control over the Strait of Hormuz through competing maritime blockades, unsettling an already fragile truce. The US military said it had destroyed six Iranian small boats and intercepted cruise missiles and drones aimed at disrupting a renewed American push to reopen the key shipping route.
Gold Price Movement Yesterday
Gold of 99.9% purity moved lower, declining by Rs 2,000, or 1.3%, to Rs 1,52,800 per 10 grams (inclusive of all taxes), compared to its previous close of Rs 1,54,800 per 10 grams, according to the All India Sarafa Association. Market participants noted that gold came under pressure in a relatively thin trading environment, as investors continued to evaluate the implications of elevated energy prices and persistent uncertainty surrounding negotiations between the United States and Iran.
Higher crude prices have strengthened expectations that interest rates may stay elevated for a longer period, with the possibility of additional tightening later in the year. This outlook has supported the US dollar as well as Treasury yields, both of which moved higher during the session and weighed on precious metal prices.
Silver Price Movement Yesterday
Silver witnessed a sharp rise in the national capital on Monday, climbing by Rs 6,800 to reach Rs 2.49 lakh per kilogram, driven by robust demand from jewellers and stockists even as global trends remained under pressure. Silver recorded a gain of Rs 6,800, or 2.8%, to settle at Rs 2,49,500 per kg (inclusive of all taxes), up from Rs 2,42,700 per kg in the previous session, as per the association’s data.
In the international market, however, spot silver declined 2.55% to $73.43 per ounce, while gold fell by $49.27, or 1.07%, to $4,565.68 per ounce. Gold continued to trade on the weaker side globally, hovering around $4,560 per ounce, as rising crude oil prices—amid ongoing uncertainty in the Strait of Hormuz—kept sentiment cautious.
Although oil prices had briefly eased after US President Donald Trump announced “Project Freedom” to facilitate the movement of vessels through the Strait, the lack of clarity around the initiative led to renewed buying in crude. At the same time, comments from a senior Iranian lawmaker describing US involvement in the Strait as a breach of a fragile ceasefire added to geopolitical concerns, keeping investors wary and markets on edge.
Gold Outlook
“Gold traded weak on Monday, declining around Rs 1,500 to Rs 1,49,900, while COMEX gold slipped to $4,566, down nearly $50, as rising crude prices continued to pressure bullion. Elevated oil prices are keeping inflation expectations high, which in turn supports a higher interest rate outlook, limiting gold’s upside. Markets are now focused on this week’s US Non-Farm Payrolls and unemployment data, which could further influence dollar strength and add pressure on gold. In the near term, gold is expected to remain volatile with a slight downside bias, with support near Rs 1,48,500 and resistance around Rs 1,51,000,” says Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.
Silver and Other Precious Metals
Silver saw a marginal rise of 0.1% to $72.76 per ounce, platinum gained 0.5% to $1,954.80, and palladium advanced 0.8% to $1,491.84. In early trade, spot gold edged up 0.2% to $4,528.99 per ounce as of 0059 GMT, recovering slightly after a sharp decline of more than 2% in the previous session, when it had dropped to its lowest level since March 31. US gold futures for June delivery also saw a modest uptick, rising 0.1% to $4,538.20.
Meanwhile, oil prices eased by more than 1% after markets weighed the impact of these disruptions alongside reports that a US-flagged vessel operated by Maersk had successfully navigated the Strait under military escort, offering some relief over supply concerns.
Investor Positioning and Policy Commentary
Investor positioning in gold-backed funds remained steady, with holdings in the SPDR Gold Trust—the world’s largest such exchange-traded fund—unchanged at 1,040.66 metric tons as of Friday. On the policy front, New York Federal Reserve President John Williams indicated that the current monetary stance remains well-positioned to manage heightened uncertainty stemming from the Middle East conflict. He added that once inflationary pressures begin to subside, the central bank could shift its focus back toward lowering interest rates. In contrast, US President Donald Trump reiterated his view that borrowing costs remain too high, continuing his push for rate cuts.
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