Gold and silver prices traded higher on Tuesday, 21 July, as renewed diplomatic efforts to broker a ceasefire between the US and Iran improved sentiment in the precious metals market. Investors also assessed the potential impact of easing geopolitical tensions on crude oil prices and the US Federal Reserve’s interest rate outlook.
Comex gold futures climbed $73 per troy ounce to an intraday high of $4,088, while silver futures advanced $2.55 to $59.55 per troy ounce.
Reports suggest that mediators have proposed a 10-day ceasefire between the two countries. A senior Iranian official told Reuters on Monday that Tehran had received the proposal as part of efforts to salvage the interim agreement.
Despite the diplomatic push, crude oil prices remained elevated after President Donald Trump said in a Truth Social post that Tehran “will pay” for the deaths of three US service members.
Brent crude climbed above $91 a barrel as fighting around the Strait of Hormuz intensified, with both sides targeting civilian infrastructure critical to regional shipping and energy supplies.
Speaking from the Oval Office, Trump said Iranian officials “want to desperately meet. And until they’re ready to meet in a meaningful way, we have no interest in meeting.” He added that Iran was “getting decimated” by US attacks.
Higher crude oil prices have increased concerns that inflationary pressures could persist, strengthening the case for the US Federal Reserve to keep monetary policy restrictive. That has limited gains in precious metals, which do not offer any yield.
Investors are now awaiting the US Federal Reserve’s interest rate decision and Chair Kevin Warsh’s comments following next week’s two-day policy meeting. The Street largely expects the central bank to leave interest rates unchanged.
However, expectations for tighter policy beyond July remain elevated, with traders assigning roughly a 68% probability of a rate hike at the September meeting. Warsh has repeatedly stressed that inflation remains a key concern, a view echoed by several other Fed officials in recent weeks.
Meanwhile, rising geopolitical tensions also boosted demand for the US dollar, with the Dollar Index strengthening to 101.1, its highest level in about a week.
The prolonged US-Iran conflict has brought an end to the multi-year bull run in precious metals. Gold has fallen more than 25% from its January peak of nearly $5,600 per ounce, while silver has declined by more than 50% from its brief high of above $120 per ounce.
MCX gold extends winning streak; silver posts sharp intraday gain
In the domestic market, the near-month MCX gold futures contract climbed ₹₹1,43,094″>1,706 per 10 grams to hit an intraday high of ₹1,43,094, extending its winning streak to a third consecutive session. The latest rally has also helped the yellow metal turn positive for July, with gains of around ₹370 so far this month.
Meanwhile, MCX silver futures surged ₹6,100 per kg to ₹2,24,500, marking the biggest intraday gain in nearly a week. Despite Tuesday’s rebound, the white metal remains 1.5% lower for July.
(With inputs from agencies)
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
