Gold and silver pared losses on Wednesday, 10 June, after the US May inflation report came in lower than expected, although gains remained capped amid escalating tensions in the Middle East. A strong US dollar also continued to keep precious metals under pressure.
Although Comex gold recovered from the day’s low of $4,152 per troy ounce — its weakest level in more than two months — it was still trading sharply lower by $93 at $4,192. If the yellow metal closes lower for the session, it would mark the fourth consecutive day of losses.
Silver futures on Comex, however, turned positive in trade after recovering nearly $2 per troy ounce to $65.46. So far this week, silver has declined 5.25%, while gold has lost 4%.
After a series of strong jobs reports, the US Consumer Price Index excluding food and energy items rose 0.2% month-on-month in May, following a 0.4% increase in April. Economists polled by Reuters had expected core CPI to rise 0.3%.
The headline annual inflation rate, which includes all categories, climbed above 4% for the first time in three years, reaching 4.2% in May, according to data released by the Labor Department on Wednesday. This compares with 3.8% in April and marks the third consecutive monthly increase.
On a monthly basis, prices rose 0.5% in May, following increases of 0.6% in April and 0.9% in March.
Turning focus to the Middle East, US President Donald Trump said on Wednesday that Iran was taking “too long to negotiate a deal” and warned that “now they will have to pay the price”.
His latest remarks came after the United States launched airstrikes early Wednesday against Iran after Trump blamed Tehran for the crash of an American attack helicopter. Iran retaliated with attacks targeting countries in the region.
The strikes came just a day after Trump stated that a US-Iran peace deal was in its “final throes”. The fresh attacks have weakened hopes that the blockade of the Strait of Hormuz could be lifted anytime soon.
As tensions in the Middle East showed no signs of easing, expectations of a US Federal Reserve rate hike in 2026 remained elevated, which also kept the US dollar firm near the 100 mark. The dollar index was trading at 99.8 during the session.
Traders are currently pricing in about a 67% chance of a US interest rate hike in December, according to CME Group’s FedWatch tool. While gold is traditionally viewed as a hedge against inflation, higher interest rates tend to weigh on the non-yielding metal.
The release of the US Producer Price Index (PPI) data on Thursday will provide investors with further clues regarding the Federal Reserve’s monetary policy outlook.
MCX gold breaks ₹1.50 lakh mark; silver slips below ₹2.35 lakh
Tracking the sharp swings in international markets, domestic prices also fluctuated widely. After dropping ₹2,341 per 10 grams in the previous session, the near-month gold futures contract on MCX ₹3,383″>plunged another ₹3,383, slipping below the ₹1.50 lakh mark to ₹1,49,060 per 10 grams.
The latest decline dragged prices to their lowest level since early May, falling below pre-duty-hike levels. From its record high of ₹1,80,779, the yellow metal has now corrected by ₹31,720.
Silver futures on MCX ₹6,417 per kilogram”>slipped ₹6,417 per kilogram, falling below the ₹2.35 lakh mark to ₹2,32,111.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
