Although gold and silver were trading higher in Tuesday’s session, both precious metals came sharply off their intraday highs as optimism around a potential peace deal in West Asia weakened following fresh US strikes on Iran, while a recovery in the US dollar also weighed on sentiment.
Comex gold gained $60 per troy ounce to touch an intraday high of $4,540 but later erased all of its gains to trade at $4,517, while silver futures dropped to $76.58 from the day’s high of $79.25.
While President stated that negotiations to end the three-month war with Iran were “proceeding nicely,” the optimism was heavily checked by reports of fresh US defensive air strikes against Iranian missile sites and boats.
Meanwhile, Iran’s Tasnim news agency reported that the Islamic Revolutionary Guard Corps had fired at a US F-35 fighter jet. Israel also threatened to intensify strikes against Hezbollah in Lebanon.
While the latest developments cloud the prospects of a swift resumption in oil flows through the Strait of Hormuz, investors still appear hopeful that peace talks can progress.
However, hopes of de-escalation in the Middle East continue to be weighed down by uncertainty surrounding key disagreements, including the future of and control over the Strait of Hormuz.
The fresh strikes on Iran also triggered a rebound in crude oil prices, reinforcing expectations that inflation could remain higher for longer and raising fears that central banks may hike interest rates in 2026 instead of cutting them.
The sharp rise in , which pushed US consumer prices to multi-year highs in April, has also dented consumer confidence, with US consumer sentiment falling to a record low in May. Consumers now expect prices to remain elevated for a longer period, strengthening the case for tighter monetary policy ahead.
Federal Reserve Governor Christopher Waller, who until recently had advocated lower rates, said the central bank should remove its “easing bias,” effectively opening the door to a possible rate hike.
Fears of higher interest rates have pushed bond yields to multi-year highs in May, making non-yielding assets such as gold less attractive to investors.
Precious metals witnessed sharp volatility throughout April as hopes of de-escalation, along with conflicting statements from both the US and Iran, kept prices largely directionless. Silver prices have remained down nearly 20% since the conflict began, while gold has declined around 15% during the same period.
Meanwhile, the dollar rebounded modestly from the day’s low to 99 on Tuesday, making dollar-priced commodities a little expensive for other currency holders.
MCX gold, silver tumble over weakness in global markets
Tracking weakness in the international market, near-month on the MCX dropped ₹796 per 10 grams to touch the day’s low of ₹1,57,661, while silver futures on the MCX also fell by nearly ₹6,000 per kilogram to ₹2,69,645.
The had closed higher last week, extending its weekly winning streak to four and taking the cumulative gain to 11%. The yellow metal also extended its weekly winning run to three, delivering cumulative gains of 5%.
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