Sentiment in bullion markets remained firm as traders assessed developments around a tentative US–Iran understanding aimed at extending a ceasefire framework and advancing negotiations. While the easing of tensions slightly reduced immediate safe-haven demand, broader uncertainty continued to support bullion prices.
At the same time, attention shifted to the Federal Reserve’s policy outcome and accompanying commentary, with rates widely expected to remain unchanged. Market participants are looking for signals on the future rate path, with expectations building that policymakers may maintain a prolonged pause, even as inflation risks persist.
Gold continues to draw support from expectations of lower real interest rates, which enhance its appeal as a non-yielding asset. Silver, meanwhile, tracked gold’s strength while also benefiting from improved sentiment across industrial-linked commodities.Underlying demand trends also remained supportive. A World Gold Council survey showed that nearly half of global reserve managers expect to increase their gold holdings over the next 12 months, reinforcing the metal’s role as a long-term strategic hedge.
On the geopolitical front, reports suggested an interim US–Iran agreement extending a fragile ceasefire period and allowing further negotiations, including provisions linked to nuclear restrictions and oil flows. However, uncertainty over the final terms kept investors cautious.
In commentary, Colin Shah, Managing Director of Kama Jewelry, said central bank buying continues to stress gold’s appeal as an inflation hedge, adding that recent price movements should be viewed as consolidation within a broader uptrend rather than a reversal. He also noted that geopolitical risks and currency trends, including rupee weakness, remain key drivers for bullion demand.
Investors now await US retail sales data and the Fed’s policy statement for further direction, with volatility expected to persist in the near term.
-With Reuters inputs
