The US dollar strengthened to a more than one-year high, making bullion costlier for overseas buyers and pressuring precious metal prices.
Markets also assessed conflicting signals surrounding US-Iran negotiations. US President Donald Trump said Iran had agreed to unlimited nuclear inspections, while Tehran denied making any such commitment, raising uncertainty over the progress of the talks.Investors further increased bets on additional US Federal Reserve rate hikes this year, with traders now pricing in three rate increases, according to the CME FedWatch Tool. Higher interest rates generally reduce the attractiveness of non-yielding assets such as gold and silver.
Focus now shifts to the US Personal Consumption Expenditures (PCE) data scheduled for release on Thursday (June 25), which may offer fresh cues on the Federal Reserve’s policy direction.The weakness followed steep losses in domestic markets on Tuesday (June 23), when gold prices in India dropped by ₹3,000 to ₹1.49 lakh per 10 grams, while silver tumbled by ₹10,500 to ₹2.35 lakh per kilogram, marking its lowest level in more than two months.
“Commodities remain under pressure due to interest rate hike concerns by the US Federal Reserve,” Praveen Singh, Head of Commodities at Mirae Asset ShareKhan, said.
Kaynat Chainwala, AVP Commodity Research, Kotak Securities, said, “Bullion had posted modest gains on Monday (June 22) as progress in US-Iran negotiations weighed on crude oil, but those gains proved short-lived as rate expectations reasserted their dominance”.
He said gold prices are likely to remain under pressure, as traders cautiously await key US economic data and speeches by Federal Reserve officials for fresh direction on the monetary policy outlook.
-With agencies inputs
