Gold and silver continued to trade higher for the third straight session on Thursday, 7 May, as expectations strengthened that the US and Iran could finally seal an agreement to end the two-month-long conflict in West Asia.
These developments also kept crude oil prices under pressure, easing concerns over inflationary pressures and reducing expectations that central banks would need to maintain restrictive policies for longer.
rallied $76 per troy ounce to an intraday high of $4,770, building on a 2.75% jump in the previous session, marking its biggest advance since late March. Silver prices, too, extended the winning run, rising $5 to $82.43 per ounce, after the white metal had gained 5% on Wednesday.
The latest rally has propelled the yellow metal weekly to date to 2.5%, while silver prices gained even more sharply by 7.8%.
Tensions in the Middle East, which had kept precious metals under severe volatility, appeared to be easing after Iran said it was reviewing the latest American proposals aimed at ending the war.
The latest media reports suggested that Iran was reviewing the latest American proposals aimed at ending the conflict. The reports indicated that the US had sent a one-page memorandum of understanding through Pakistani intermediaries to formally end the conflict and pave the way for the gradual reopening of the Strait of Hormuz.
US President Donald Trump posted on social media that the two-month war could soon end, and that oil and natural gas shipments disrupted by the conflict could restart. However, he said that would depend on Iran accepting a reported agreement, the details of which were not disclosed.
Trump also warned Iran of a unless a deal was reached that included reopening the crucial Strait of Hormuz to international shipping.
In the commodity market, Brent crude, the international benchmark, declined $5 to an intraday low of $96.32 a barrel, extending losses that erased the sharp gains recorded earlier this week.
Meanwhile, the on Thursday, extending losses from the prior session as markets made greenback commodities less expensive for other currency holders.
Markets await the monthly US employment report on Friday to assess how the Fed will move forward with monetary policy this year.
While the falling crude oil prices re-ignited hopes of rate cuts, Federal Reserve Bank of Chicago President Austan Goolsbee and President of St. Louis Fed Alberto Musalem struck a note of caution, highlighting that inflation is running above the target of 2%, Bloomberg reported.
MCX gold gains over ₹1,700; silver rebounds to ₹2.65 lakh
Tracking the strong rally in the international market, the near-term gold futures contract on to hit the day’s high of ₹1,53,865 per 10 grams. In the previous session, the yellow metal had gained 1.6%, or ₹2,379, marking its biggest intraday gain since April 14.
Silver futures on MCX also extended gains, rising ₹12,235 per kg to reclaim the ₹2.65 lakh mark and touch an intraday high of ₹2,65,500 per kg. So far this week, the white metal has gained ₹13,500.
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