Gold Silver Price: Tremendous rise in gold and silver, a statement by Trump changed the whole game

Gold Silver Price: Gold and silver prices rose on Monday due to the fall in the dollar and softening oil prices. The softening of oil prices came due to new hopes of a peace deal between the US and Iran, which improved market sentiment regarding disruptions in global supply. In the international market, spot gold was trading more than 1 per cent higher during the day at around $4,565 an ounce, while spot silver was trading more than 3 per cent higher at around $78 an ounce. The dollar index remained down throughout the day, which provided support to gold.

In the domestic commodity market, June gold futures remained steady on the Multi Commodity Exchange, last trading at ₹1,59,325 per 10 grams. The most active silver contract on the Multi Commodity Exchange rose 1.7 percent to ₹2,76,500 per kg. MCX prices take cues from international market prices.

improvement in gold prices

Oil prices fell below the $100 per barrel mark. On Saturday, US President Donald Trump said that an agreement between Washington and Tehran is “almost finalized.” He further said that the Strait of Hormuz, which is an important trade route, could reopen soon. His statement helped gold recover from last week’s losses, as it reduced inflation fears and reduced expectations of tight monetary policy from central banks around the world.

Tim Waterer, chief market analyst at KCM Trade, told Reuters that Trump was raising market expectations of some kind of agreement with Iran that could reopen the Strait of Hormuz. This possibility has affected oil prices and as a result gold has received considerable support from an inflation perspective.

Despite new hopes for a possible peace deal, market sentiment remains cautious. On Sunday, US media outlet Axios reported that it could take “a few more days” for the White House to approve the agreement.

Interest rates may increase in December

Traders have raised expectations of an interest rate hike by the US Federal Reserve in late December, and for now, the central bank is not expected to make any rate cuts. In the long run, higher interest rates increase the appeal of interest-bearing assets such as bonds and currencies, which has a negative impact on precious metals.

On Friday, Kevin Wersh was sworn in as the new Chairman of the US Federal Reserve, replacing Jerome Powell. Varsh is known for his strict policy. For further signals, markets will keep an eye on US GDP data and the ongoing conflict in West Asia. US markets are closed today for Memorial Day. Despite today’s recovery, gold prices are down about 13% since tensions began in the Middle East on February 28.

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