Gold and silver prices declined on Friday, heading for weekly losses amid Middle East tensions and inflation concerns. Investors await US jobs data and RBI policy for further direction.
Gold Rate Today: Prices Slip Amid Global Uncertainties
Gold prices slipped on Friday and remained on course for a weekly decline as geopolitical uncertainty in the Middle East weakened expectations of a peace agreement between the US and Iran, while persistent inflation concerns and the possibility of higher interest rates weighed on sentiment. Although gold is widely regarded as a safeguard against inflation, higher interest rates generally reduce the appeal of the non-interest-bearing asset.
Efforts to ease tensions in the region faced a setback after the Iran-backed Hezbollah group rejected a fresh ceasefire proposal in Lebanon. At the same time, Israel stated that it would not pull its troops out of the country, complicating President Donald Trump's attempts to end the conflict and advance diplomatic engagement with Tehran.
Gold Price Round-Up on Thursday
Gold prices staged a recovery in the national capital on Thursday, climbing back above the Rs 1.6 lakh mark per 10 grams as lower crude oil prices provided support amid continuing uncertainty surrounding developments in West Asia. According to the All India Sarafa Association, gold of 99.9% purity advanced by Rs 700 to Rs 1,60,300 per 10 grams, inclusive of all taxes. The latest rise came after a sharp Rs 1,850 decline on Wednesday and followed a Rs 1,050 increase on Tuesday, underscoring the highly volatile price swings witnessed in the precious metals market this week.
Spot Gold Trades Lower
Spot gold was trading 0.3% lower at $4,462.22 per ounce as of 0049 GMT. The precious metal has lost around 1.6% so far this week. Gold futures in the US for August delivery declined 0.4% to $4,489 per ounce.
Silver Rate Today: Spot Silver Falls
Among other precious metals, spot silver fell 0.6% to $73.45 per ounce. Platinum declined 1.3% to $1,876.58, while palladium dropped 1.5% to $1,301.25 per ounce. All three metals were also on track to post weekly losses.
Tough Policy Choices for Fed
Kansas City Federal Reserve President Jeffrey Schmid said on Thursday that policymakers currently face a choice between maintaining patience and keeping interest rates unchanged or raising rates further to contain inflation, which has remained above target for an extended period. Separately, San Francisco Federal Reserve President Mary Daly said future interest-rate decisions will depend on incoming economic data. She added that monetary policy is currently positioned appropriately and that the Federal Reserve is prepared to act in either direction if conditions warrant.
Investment Demand to Surpass Jewellery Demand
According to consultancy Metals Focus, investment demand for physical gold is expected to surpass jewellery demand this year for the first time. The shift is being driven by a double-digit decline in jewellery consumption as elevated prices discourage purchases.
Investors are now focused on the release of the US nonfarm payrolls report for May later in the day, which could provide further insight into the Federal Reserve's policy trajectory. Market participants are also awaiting the Reserve Bank of India's monetary policy announcement for additional clues on the interest-rate outlook and the direction of precious metals prices.
Data released on Thursday showed that India's physically backed gold exchange-traded funds (ETFs) recorded their first monthly net outflow in a year during May, as investors booked profits after a sharp rally in prices driven by increased import duties.
Live Rates: Gold 22K per gram: Rs 14,335; Silver per 10 grams: Rs 2,800; Platinum per 10 grams: Rs 59,380.
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