Precious metals recovered much of their intraday losses as prospects of a potential Israel-Iran ceasefire improved sentiment, although prices continued to remain under pressure after strong US jobs data reinforced expectations of a possible interest rate hike by the US Federal Reserve.
Comex gold rebounded $84 per troy ounce from the day’s low to trade around $4,377, while silver futures on Comex recovered nearly $3 to the $69 level. Gold ended last week with a 5% decline, marking its steepest weekly fall since mid-March. Silver posted an even sharper decline of 9%, its worst weekly drop in over two months.
Israel and Iran exchanged fire early Monday in their first direct attacks since the US brokered a ceasefire with Tehran two months ago. Hours later, Iran’s military reportedly said it would halt offensive operations, though it warned that harsher attacks could follow if Israel resumed strikes on Lebanon.
The statement from Iran came shortly after US President Donald Trump said in a post on Truth Social that both Israel and Iran were looking at an immediate ceasefire, adding that final negotiations on peace were underway.
“The blockade will remain in place and in full force and effect until a ‘Final Deal’ is reached. Things should move quickly,” he further said in the post.
In the previous session, gold had dropped 3%, while silver plunged 6.7% after US job growth exceeded all forecasts in May, fuelling expectations that the Federal Reserve could raise interest rates by the end of the year.
The stronger jobs report came at a time when inflation remains well above the US Federal Reserve’s target. Since the beginning of the Middle East conflict in late February, expectations of higher interest rates have strengthened, although they briefly eased following signs of a potential peace deal in the region.
However, the lack of meaningful progress toward a resolution has continued to keep both gold and silver under pressure. Meanwhile, the stronger US dollar is also weighing on prices, as a firmer greenback makes dollar-denominated commodities more expensive for holders of other currencies.
The greenback rebounded to 100 in today’s trade, the highest level in over two months against a basket of currencies. Gold and silver have fallen more than 17% and 18.3%, respectively, since the US-backed conflict with Iran began in late February.
Investors are now awaiting the US Consumer Price Index (CPI) data on Wednesday and Producer Price Index (PPI) data on Thursday for further clues on the Federal Reserve’s interest rate trajectory.
MCX gold, silver remain volatile
Tracking volatility in the international market, the near-month gold futures contract on MCX also rebounded ₹2,560 per 10 grams to ₹1,55,308 after crashing nearly ₹4,000 during Friday’s trade. Although the yellow metal recovered much of its early losses, it continued to trade in the red, and if it closes lower, it would mark its second consecutive day of decline.
The silver futures contract recovered ₹11,937 from the day’s low of ₹2,39,064, which itself marked the lowest level since late April. In the previous week, the white metal had lost nearly 7% of its value, extending its weekly losing streak to a second week.
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