Gold, silver shrug off global weakness amid US-Iran diplomacy hopes

Gold prices had surged by Rs 8,550 in a day to Rs 1,65,350 per 10 grams following the announcement of a hike in import duty on the precious metals.

Gold and silver prices edged higher in spot markets on Thursday as traders remained cautiously optimistic amid US-Iran tensions and elevated global crude oil rates stoking inflationary pressures.

In Delhi's spot market, gold of 99.9 per cent purity rose for the third straight session, rising by Rs 600 to Rs 1,65,500 per 10 grams (inclusive of all taxes), according to local marketmen.

The metal has remained volatile since the central government raised the import duty on precious metals to 15 per cent last week. Gold prices had surged by Rs 8,550 in a day to Rs 1,65,350 per 10 grams following the announcement of a hike in import duty on the precious metals. The metal fluctuated between gains and losses in subsequent sessions, adding a total of Rs 150 since the duty hike on Wednesday last week.

''Gold traded firm on Thursday following a recovery from recent lows, bolstered by improving optimism surrounding US-Iran diplomatic efforts, which positively influenced sentiment in the bullion market,'' Saumil Gandhi, Senior Analyst - Commodities at HDFC Securities, said.

Investor confidence increased as expectations grew that negotiations between the US and Iran could help alleviate geopolitical tensions in the Middle East, he added.

Silver prices also snapped a two-day losing streak, climbing Rs 5,000 to Rs 2,71,000 per kg as investors returned to the white metal after recent sharp corrections, market players said. The white metal drew additional support from easing US Treasury bond yields.

Gaurav Garg, Research Analyst at Lemonn Markets Desk, said, ''Silver also benefited from a pullback in US Treasury bond yields from multi-year highs, which typically boosts demand for precious metals as alternative investments.

According to Manav Modi, Commodities Analyst, Motilal Oswal Financial Services Ltd, sentiment improved after US President Donald Trump indicated that talks with Iran were progressing positively and suggested the conflict may be nearing its ''final stages''.

However, Trump warned that military action remained possible if negotiations collapse, which kept bullion markets on edge.

Precious metals traded lower in the futures market.

On the Multi Commodity Exchange, gold for June delivery declined Rs 896 to Rs 1,59,110 per 10 grams as a recovery in the rupee weighed on local prices.

Silver futures also declined, with the most-traded July contract plunging by Rs 4,965, or nearly 2 per cent, to Rs 2,69,300 per kg in futures trade.

''Gold traded with range-bound volatility as sharp rupee recovery created pressure on domestic bullion prices,'' Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.

The stronger rupee reduced the impact of international gold prices on the MCX, keeping domestic bullion under pressure despite weak global cues.

Trivedi said gold would continue to take direction from crude oil prices, rupee volatility, and developments around the US-Iran conflict, which remain the key drivers for bullion sentiment.

Praveen Singh, Head of Commodities at Mirae Asset ShareKhan, said gold may remain range-bound in the near term as traders monitor developments in US-Iran negotiations, though the broader outlook remains somewhat bearish as expectations for interest rate cuts by the US Federal Reserve continue to fade while the American economy continues to do reasonably well.

Investors are now awaiting preliminary Manufacturing and Services PMI numbers from major economies later in the day for further cues on global monetary policy and its impact on bullion prices.

In the international markets, the Comex gold futures June contract fell 1 per cent to USD 4,512 per ounce, and silver for July delivery slipped nearly 3 per cent to USD 75.35 per ounce in New York.

Spot gold also edged lower to USD 4,534.54 per ounce while silver slipped nearly 1 per cent to USD 75.39 per ounce in the overseas trade.