Gold prices rose nearly 1% to ₹1.51 lakh per 10 grams in futures trade on Friday, tracking a firm trend in overseas markets after US President Donald Trump announced he had cancelled plans for a military strike on Iran, according to The Hindu BusinessLine. On the Multi Commodity Exchange, the yellow metal for August delivery increased by ₹2,121, or 1.4%, to ₹1,51,053 per 10 grams in 9,122 lots. Globally, Comex gold futures for August contract jumped $154, or 3.6%, to $4,267 per ounce in New York. The move eased immediate geopolitical concerns and boosted demand for precious metals, as brokerage firm Axis Securities noted. Trump on Thursday cited what he said were "discussions" that "have been brought to the highest level of Iranian leadership" surrounding a negotiated end to the Iran war, telling reporters in the Oval Office that a signing could take place as soon as this weekend in Europe and that Vice President JD Vance would attend if it materializes. However, Iran's semi-official news agency Fars said earlier Thursday that officials had not yet approved the text of any agreement with the US, citing an unnamed source. Trump later claimed that Iran's supreme leader had agreed to a peace deal, however, he clarified that the agreement had not been finalized, calling it "a very strong memorandum of understanding that is a little bit conceptual."
Gold prices had edged lower on Friday and were on track for a weekly loss of 3.32%, as reported by LiveMint. Spot gold was down 0.5% at $4,191.17 per ounce as of 0252 GMT, while US gold futures for August delivery rose 2.4% to $4,212.70. The precious metal had fell to an over six-month low on Thursday before closing higher at $4,219.69 as US President Donald Trump called off planned military strikes on Iran and signalled an imminent peace deal. In the latest session, MCX gold rate for August futures contracts opened higher by ₹649, or 0.44%, at ₹1,49,581 per 10 grams as against its previous close of ₹1,48,932 level. MCX silver price for July futures contracts opened higher by ₹5,167, or 2%, at ₹2,44,817 per kg, as compared to its previous close of ₹2,39,653 level. With today's gains, silver has risen ₹10,012, or 4%, over the last two days, while gold has surged ₹1,600 during this period. Despite today's relief rally, silver remains down 1.43% for the week, putting it on track for a third consecutive weekly loss, while gold has declined 3.32% over the same period.
Market attention is now focused on May's US Consumer Price Index data due on Wednesday, which will help shape the Federal Reserve's monetary policy outlook. US producer prices increased more than expected in May, leading to the largest annual gain in 3-1/2 years as the West Asia conflict drove up the cost of energy products, according to The Hindu BusinessLine. Traders are currently pricing a 60% chance of a US rate hike in December, according to the CME Group's FedWatch tool, down from the previous 70% probability. Goldman Sachs expects the US Federal Reserve to keep interest rates unchanged through 2026 and delay rate cuts until 2027, citing stronger economic activity and jobs growth. The war in the Middle East has raised concerns about global inflation, making central banks more likely to keep interest rates steady or raise them — a headwind for precious metals. Holdings of the largest gold-backed exchange-traded-fund (ETF), New York's SPDR Gold Trust, fell about 0.3% to 923.89 metric tons on Wednesday, reflecting reduced investor confidence in the non-yielding metal. US consumer sentiment rose in early June for the first time in four months as lower gasoline prices provided some relief for Americans grappling with a surge in inflation, according to LiveMint. While gasoline prices are still above pre-war levels, the drop seen in recent weeks led Americans to be less pessimistic about their personal finances.
President Donald Trump on Thursday said the United States and Iran could sign a peace deal as early as this weekend that would reopen the Strait of Hormuz to shipping, though Iran countered that it had not reached a final decision on an agreement, as reported by The Hindu BusinessLine. The pledges from both sides to stop missile strikes followed an appeal by US President Donald Trump for de-escalation as he seeks a wider resolution to the conflict that's roiled global markets. The agreement represents a significant development that has helped stabilize precious metals markets after weeks of volatility, though traders remain cautious about its sustainability given the ongoing tensions in the region. Trump's latest comments marked the latest conflicting signal the US president has sent about the status of the war, vacillating between threats of intensified attacks and insisting a peace deal is within reach. The US President also halted airstrikes on Iran following two consecutive days of attacks and Tehran announced the closure of the Strait of Hormuz to all vessels. In his latest post on Truth Social, Trump said he had called off the strikes after discussions with Iran were elevated to the highest levels of the Iranian leadership and received approval. He said key points of a proposed agreement had been approved "in both concept and great detail" by parties including the United States, Israel, Saudi Arabia, the UAE, Qatar, Turkey, Pakistan, Bahrain, Kuwait, Jordan and Egypt, among others. However, Iran's Fars News Agency, citing a source, reported that Iran's negotiating team said reports claiming a final agreement had been reached between Iran and the United States were entirely inaccurate. The report added that Iran's review and decision-making process has not yet been completed, therefore both the reported signing date of Sunday and the proposed venue of Geneva were categorically denied.
Gold has been losing momentum in recent weeks as the Iran conflict, now in its fourth month, disrupted energy flows through the Strait of Hormuz, caused oil prices to rise and raised the likelihood of interest-rate hikes as central banks try to keep inflation in check, according to latest reports. Gold has fallen 20% since the Middle East conflict began, highlighting the significant impact of the prolonged geopolitical tensions on precious metals markets. The current price levels remain significantly below pre-war levels, with bullion having erased its year-to-date gains on Friday after a strong US jobs report fueled bets that the Federal Reserve will hike rates this year. COMEX gold rates are down by nearly 0.50% at $4,342 per ounce, while COMEX silver rates are down by nearly 1.60% at $68 per ounce. Spot gold price declined 0.5% to $4,191.17 per ounce and was set for a weekly loss of 3.2%, while spot silver prices fell 0.4% to $67.10 per ounce. The European Central Bank hiked interest rates on Thursday for the first time in almost three years, with President Christine Lagarde cautioning that the inflation driven by the conflict is widening beyond just energy. Market participants will monitor the developments in US-Iran negotiations and commentary from Federal Reserve officials, which will be key in shaping expectations for interest rates and precious metals, as noted by Manav Modi from Motilal Oswal Financial Services Ltd.
