Precious metals recovered smartly from the day’s lows in Monday’s trade on May 18 as bond yields stabilised after hitting multi-year highs last week, although gains remained capped amid rising fears of persistent inflation.
COMEX gold futures rebounded by $27 per troy ounce to an intraday high of $4,588. Meanwhile, silver futures also recovered $1.08 to $78.62 per ounce after falling to an intraday low of $74.11. Over the last two trading sessions, the white metal was down by 15%.
In the Middle East, after US President Donald Trump said Iran needed to “get moving” or there “won’t be anything left.” Both countries continue to hold negotiations aimed at ending the conflict, although Iranian media reports suggested the two sides remain deeply divided, with the US offering “no tangible concessions” during talks.
The prolonged standoff has kept crude oil prices elevated, with touching $112 per barrel in trade and surging over 80% so far this year. Last week’s two-day summit between Trump and Chinese President Xi Jinping ended without any concrete progress toward reopening the Strait of Hormuz.
Over the weekend, energy infrastructure in the Persian Gulf was also reportedly targeted, including a nuclear facility in the United Arab Emirates, adding to geopolitical tensions in the region.
Looking ahead, the upcoming meeting minutes, due on Wednesday, are expected to dictate the near-term direction of precious metals. The minutes are likely to provide further insight into the Fed’s last policy meeting, during which it decided to keep interest rates unchanged between 3.50% and 3.75%.
However, analysts believe the impact of the minutes could remain limited following the recent macroeconomic data. Recent inflation reports showed that the consumer price index (CPI) climbed to 3.8%, while the producer price index (PPI) rose to 6.0%.
Earlier data also showed that the unemployment rate remained steady at 4.3%, with the US economy adding more than 115,000 jobs. As a result, analysts increasingly expect the Federal Reserve to keep interest rates elevated for longer, while speculation is also rising that policymakers could still consider another rate hike before the end of the year.
As expectations of higher interest rates strengthened, bond yields reacted sharply, with the US 10-year Treasury yield climbing to 4.6% and the 30-year yield crossing the 5% mark for the first time in years, making non-yielding bullion less attractive to investors.
MCX gold jumps over ₹1,679; silver tops ₹2.80 lakh
In the domestic market, the near-month gold futures contract on MCX surged ₹1,679 per 10 grams to touch ₹1,60,266. Meanwhile, silver futures on MCX jumped ₹8,514 per kilogram to hit the day’s high of ₹2,80,400 per kg.
If the white metal sustains gains till the close, it will end its two-day losing streak. Over the previous two trading sessions, had cumulatively lost ₹28,352 per kilogram.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.