Precious metals recovered smartly from the day's lows on May 18 as bond yields stabilised after hitting multi-year highs last week. According to reports from LiveMint, COMEX gold futures rebounded by $27 per troy ounce to an intraday high of $4,588, while silver futures also recovered $1.08 to $78.62 per ounce after falling to an intraday low of $74.11. However, gains remained capped amid rising fears of persistent inflation. The recovery comes as silver continues to attract renewed investor interest, with small investors showing increased demand for physical silver coins and bars, while institutional investors have increased their positions in silver-backed ETFs. As The Silver Forum advises, investors with extra cash should consider converting it to silver, citing current market conditions in India where the government is reportedly discouraging silver purchases.
In the Middle East, tensions remained elevated after US President Donald Trump said Iran needed to "get moving" or there "won't be anything left." As reported by LiveMint, both countries continue to hold negotiations aimed at ending the conflict, although Iranian media reports suggested the two sides remain deeply divided, with the US offering "no tangible concessions" during talks. The prolonged standoff has kept crude oil prices elevated, with Brent crude futures touching $112 per barrel and surging over 80% so far this year.
Looking ahead, the upcoming Federal Reserve meeting minutes, due on Wednesday, are expected to dictate the near-term direction of precious metals. According to LiveMint, the minutes are likely to provide further insight into the Fed's last policy meeting, during which it decided to keep interest rates unchanged between 3.50% and 3.75%. However, analysts believe the impact of the minutes could remain limited following recent macroeconomic data, with the consumer price index (CPI) climbing to 3.8% and the producer price index (PPI) rising to 6.0%.
In the domestic market, the near-month gold futures contract on MCX surged ₹1,679 per 10 grams to touch ₹1,60,266, while silver futures on MCX jumped ₹8,514 per kilogram to hit the day's high of ₹2,80,400 per kg. As reported by LiveMint, if the white metal sustains gains till the close, it will end its two-day losing streak. Over the previous two trading sessions, silver had cumulatively lost ₹28,352 per kilogram. The domestic recovery aligns with global trends as silver continues to play a crucial role in the global economy as both a precious metal for investment and an industrial commodity, with current spot prices hovering around £21 per troy ounce.
As expectations of higher interest rates strengthened, bond yields reacted sharply, with the US 10-year Treasury yield climbing to 4.6% and the 30-year yield crossing the 5% mark for the first time in years. According to LiveMint, making non-yielding bullion less attractive to investors. Analysts increasingly expect the Federal Reserve to keep interest rates elevated for longer, while speculation is also rising that policymakers could still consider another rate hike before the end of the year. The elevated bond yields have created additional headwinds for precious metals, though the recent recovery suggests some stabilisation in market conditions.
