Gold and silver prices rebounded from last week’s lows as oil prices slipped over renewed hopes of diplomatic talks between the US and Iran. A decline in oil prices helps ease inflationary fears, aiding demand for precious assets.
In international markets, spot gold was trading near the $4,773/oz mark, while spot silver was quoted around the $77/oz level. Precious metals also gained as the dollar index slipped near its one-month low levels. A soft dollar makes precious metals less expensive for overseas currency holders, thereby aiding demand.
Oil slips below $100 over renewed hopes of negotiations
While the US blockade of Iran’s ports remains in effect, US President Donald Trump said that Tehran wants to work out a deal with Washington. The American President said, “we’ve been called by the other side” and “they want to work a deal.”
According to a report by Associated Press, both countries may begin a new round of negotiations starting from Thursday, April 16. This comes amid the recently failed ceasefire talks held in Islamabad.
The renewed hopes of diplomatic talks helped cool down oil prices from the $100/bbl mark, as the global benchmark, Brent Crude, was quoted near the $97/bbl level. US Crude, West Texas Intermediate, too slipped towards $96/bbl.
This weighed on investor sentiment for gold and silver as it helped soften expectations of tighter monetary policy by global central banks. Tighter monetary policy makes interest-yielding assets like currency and bonds more appealing for investors.
“Markets appear to think that there’s still time for a deal between the United States and Iran,” Reuters quoted Ilya Spivak, head of global macro at Tastylive, as saying.
However, despite short relief, oil prices continue to trade at elevated levels as the crucial trade route—the Strait of Hormuz, through which nearly 20% of the global energy supply transits—remains largely closed.
Low expectations of rate cut in December
In the current geopolitical backdrop, few market participants still price in expectations of a rate cut by the US Federal Reserve in December. Before the war began at the end of February, traders were weighing in two rate cuts by the Fed for 2026.
“Near-term, a thin macro calendar might make U.S.-Iran headlines the driving engine. That sets the stage for choppy price action for now,” Spivak told Reuters, adding that gold could face resistance around $4,850 levels.
MCX observes partial closure
On the domestic front, MCX Gold futures for June ended flat at Rs 1,51,983 per 10 grams, while MCX Silver futures for May were down by more than 1%, last quoted at Rs 2,40,499 per kg.
The Multi Commodity Exchange will observe a partial closure today on the occasion of Ambedkar Jayanti. Trading will remain suspended for the morning session and will resume for the evening session at 5:00 PM (IST). Prices will be aligned with international market cues.