Gold regains sparkle, as US-Iran deal boosts demand for bullion

Gold prices climbed by Rs 2,500 to Rs 1.59 lakh per 10 grams in the national capital on Monday, while silver advanced to Rs 2.60 lakh per kg, tracking strong global trends after the US and Iran struck a peace deal framework.

According to marketmen, the yellow metal of 99.9 per cent purity jumped Rs 2,500 to Rs 1,59,400 per 10 grams (inclusive of all taxes) from Friday’s closing level of Rs 1,56,900 per 10 grams.

Silver also advanced for the second straight session, surging Rs 5,000 to Rs 2,60,700 per kilogram (inclusive of all taxes). The white metal had settled at Rs 2,55,700 per kg in the previous session. Analysts said the uptrend in precious metals gathered pace after Washington and Tehran announced an interim agreement to end hostilities and reopen the Strait of Hormuz, a key route for global energy supplies. “Gold advanced on Monday, supported by gains in the international market, with spot gold climbing above the $ 4,325 per ounce level,” Saumil Gandhi, Senior Analyst — Commodities at HDFC Securities, said. The agreement drove oil prices to a multi-week low, reduced concerns over inflation and lowered the likelihood of a more aggressive monetary policy stance, while a weaker dollar and lower Treasury bond yields further supported the bullion, he added.

In the international markets, spot gold increased by $121.33, or nearly 3 per cent, to $4,340.65 per ounce, while silver advanced by $2.74, or 4.04 per cent, to $70.74 per ounce.

“Gold climbed above $4,300 an ounce on Monday, advancing for a third consecutive session, as oil prices declined and concerns over persistent inflation and potential rate hikes receded,” Rajkumar Subramanian, Head — Product & Family Office, PL Wealth, said.

Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities, said a formal agreement expected to be signed on June 19 could further soften inflation expectations and support broader market stability.

Investors will shift their focus to the US Federal Reserve’s (Fed) first policy meeting under Chair Kevin Warsh, along with updated economic projections.

According to Kaynat Chainwala, AVP Commodity Research, Kotak Securities, the Fed’s outlook will be closely watched as lower energy prices could reduce tightening expectations, weaken the dollar and keep bullion prices well supported even as the geopolitical risk premium fades.