Gold and silver held steady on Wednesday as conflicting market forces created a balanced trading environment. COMEX gold was last at $4,563 an ounce, up 27.80 or 0.61%, after moving in a range of $4,535.60 to $4,564.80 an ounce. COMEX silver stood at $76.915 an ounce, rising 0.734 or 0.96%, with an intraday range of $75.575 to $77.075 an ounce. The precious metals' performance came as investors weighed the potential benefits of a U.S.-Iran peace deal against concerns over inflation and rising interest rates.
The market optimism was driven by significant diplomatic developments regarding Iran. US President Donald Trump said negotiations with Iran were in the final stages, while warning of possible strikes if a deal was not reached. Iran responded cautiously, with the Revolutionary Guards stating that 'If aggression against Iran is repeated, the promised regional war will extend beyond the region this time.' Markets continued to track developments in the West Asia closely, with oil prices and US Treasury yields easing on expectations of a possible diplomatic breakthrough, while global equity markets advanced. However, inflation concerns linked to energy volatility continued to support safe-haven demand for precious metals.
Federal Reserve policy considerations added complexity to the gold market dynamics. Minutes from the US Federal Reserve's April meeting indicated that policymakers remained cautious on inflation, with most members signalling that additional policy tightening could be required if price pressures persist above the 2% target. Fed officials also noted that a steady jobless rate and two months of stronger-than-expected job creation indicate the employment market remains resilient and doesn't require lower interest rates to support it. According to Prithviraj Kothari, Managing Director at RiddiSiddhi Bullions, renewed US–Iran tensions have lifted inflation fears through higher oil prices and reduced expectations of rate cuts, with markets now even pricing in the possibility of a hike before year-end.
From a technical perspective, precious metals face mixed prospects. Kothari said gold may test the $4,350 an ounce level, with the broader uptrend intact above $4,300 an ounce. However, silver could see further downside toward $71 and $67 an ounce after breaking key support levels. The technical analysis suggests that while gold maintains its uptrend, silver faces potential weakness due to breaking critical support levels. Gold remained supported as investors weighed oil-driven inflation risks against optimism over a potential US–Iran peace deal, with concerns over energy supply disruptions continuing to provide a floor to bullion prices.
