The domestic rally mirrored gains in international markets, where spot gold advanced around 2% to hover near $4,650 per ounce, while US gold futures also posted similar gains. Silver prices overseas jumped more than 3%, lending additional support to Indian rates.
The uptrend comes amid improving sentiment in global markets after indications of possible de-escalation in West Asia tensions. Signals from the United States on progress toward an agreement with Iran and a pause in certain military operations helped ease geopolitical risk premiums. As a result, crude oil prices softened, reducing immediate inflation concerns.
A weaker US dollar further aided the rally in bullion. Since gold and silver are priced in dollars, a softer currency makes these metals cheaper for holders of other currencies, boosting demand globally and reflecting in domestic prices.Lower oil prices also play a role in shaping interest rate expectations. Cooling inflation pressures may reduce the likelihood of prolonged high interest rates, which typically weigh on non-yielding assets like gold. This combination of factors supported buying interest in precious metals.
Market participants are now watching upcoming US economic data, particularly the non-farm payrolls report, for cues on the Federal Reserve’s policy stance. Any shift in rate expectations could influence the near-term trajectory of gold and silver prices.
Analysts caution that while the current rally is driven by easing geopolitical concerns and currency movements, any renewed escalation in tensions could trigger volatility and profit booking in bullion markets.
-With Reuters inputs
