Gold rebounds to ₹1.61 lakh/10g on weak dollar, easing oil prices

Silver prices also strengthened significantly, rising ₹1,300 to ₹2,71,000 per kilogram from the previous close of ₹2,69,700 per kg. In international markets, silver rose 2 per cent to USD 76.29 per ounce, demonstrating broad-based strength across precious metals. Analysts said precious metals drew support from a pullback in crude oil prices, which helped ease fears of an inflation shock stemming from tensions in West Asia. Lower US Treasury yields and a weak US dollar boosted the appeal of bullion prices, as noted by market experts. Silver prices also rallied sharply on MCX, gaining ₹5,248 per kilogram to hit the day's high of ₹2,71,411, according to latest domestic market data.

Market sentiment had improved on hopes of an imminent US-Iran peace agreement, but turned cautious after another round of military escalation over the weekend. Iran's Tasnim News Agency said Tehran had suspended indirect negotiations with Washington and was considering a blockade of the Strait of Hormuz, citing violations of the existing ceasefire arrangement. However, US President Donald Trump rejected reports of a breakdown in talks and said discussions with Iran were continuing rapidly and that an Israeli strike on Beirut had been called off following his intervention. According to The Hindu BusinessLine, analysts said precious metals prices gained as investors reassessed geopolitical risks after fresh military developments in West Asia which complicated efforts to secure a lasting peace agreement between the US and Iran. Crude oil prices surrendered nearly half of Monday's gains after US President Donald Trump said negotiations with Iran were continuing at a "rapid pace", easing concerns that talks had completely broken down. Additional support came from a partial ceasefire announcement between Hezbollah and Israel, helping stabilise geopolitical risk sentiment.

The precious metals recovery was supported by rupee weakness, which helped offset some of the pressure from global market uncertainty and supported gains in the domestic bullion market. The softer rupee helped offset some of the pressure from global market uncertainty and supported gains in the domestic bullion market, said Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities. The yield on the benchmark 10-year US Treasury note fell 1.1%, reducing the opportunity cost of holding non-yielding bullion. A raft of economic data showed first-quarter U.S. GDP grew at a more sluggish pace than originally reported, the saving rate sank to its lowest level since June 2022, inflation continued to heat up, and new orders for core-capital goods unexpectedly dropped. Domestic gold prices also received support from weakness in the Indian rupee, according to market experts.

The precious metals recovery reflects growing expectations of higher interest rates that weigh on non-yielding assets like gold. U.S. personal consumption expenditures price index data showed 3.8% growth in the 12 months through April, with the PCE price index rising 0.4% month-on-month in April after shooting up 0.7% in March. U.S. Treasury yields turned lower following weaker-than-expected U.S. economic data, with the 10-year note yield falling 2.6 basis points to 4.455% and the 30-year bond yield declining 2.5 basis points to 4.9857%. Minutes of the Fed's April 28-29 meeting showed a growing number of officials open to the possibility of rate increases, adding complexity to the interest rate outlook. As reported by Reuters, "higher-for-longer rate prospects weigh on non-yielding assets, compounding bullion's weakness and leaving it vulnerable to new 2026 lows." Markets are now focused on Friday's US nonfarm payrolls report and commentary from Federal Reserve officials for clues on the interest-rate path, according to Kotak Securities.