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Informist, Wednesday, May 20, 2026

 

By Reshma Ravi

 

MUMBAI – Futures contracts of gold fell on the Multi Commodity Exchange of India Wednesday, tracking a fall in contracts on the COMEX due to a rise in the dollar. Prices were also weighed down by higher Treasury yields. Market participants now await the Federal Open Market Committee meeting minutes, due later in the day, for further cues on the interest rate path.

 

"Gold prices plunged amid strength in the dollar index and the US Treasury yield," Manoj Jain, director of Prithvi Finmart, said in a note. The 10-year US Treasury yield climbed to 4.687%, its highest level since January 2025, while the 30-year Treasury yield hit 5.197%, a level not seen since July 2007.

 

At 1605 IST, the most active June contract of GOLD was down 0.2% at INR 158,740 per 10 grams on the MCX. The same-month contract on the COMEX was down 0.7% at $4,480.9 per ounce. At 1539 IST, the most active July SILVER contract on the MCX was up 0.9% at INR 272,565 per kilogram, and the same-month contract on COMEX was up 0.6% at $75.61 per ounce. 

 

At 1609 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was up 0.1% at 99.39. A strong greenback makes dollar-priced commodities, such as gold and silver, less appealing to holders of other currencies, thereby denting demand.

Gold prices also fell due to a lack of progress in US-Iran talks, which fuelled fears of higher inflation and expectations of higher interest rates. Typically, higher interest rates dim the appeal of the non-interest-bearing precious metal. US President Donald Trump warned that the US could resume strikes on Iran within "two or three days" if Tehran rejected Washington's peace terms, despite earlier reports that a planned attack had been cancelled following appeals from Gulf allies. "The prolonged conflict has effectively disrupted shipping traffic through the strategic Strait of Hormuz, driving oil prices higher and increasing global inflationary pressures," analysts at Kedia Advisory said. 

 

However, "despite short-term pressure, underlying demand fundamentals for gold remain supportive," Kedia Advisory said. Goldman Sachs has revised its forecast for central bank gold purchases higher, now expecting average buying of around 60 tonnes per month through 2026 amid the ongoing war in West Asia and reserve diversification trends.

 

"We expect gold and silver prices to remain volatile this week amid volatility in the dollar index, volatility in the crude oil prices and the US-Iran peace deal uncertainty," Manoj Jain said. 

 

Outlook for the rest of the session:

--MCX gold seen at INR 157,500–INR 161,500 per 10 grams

--COMEX gold seen at $4,450–$4,540 an ounce

--MCX silver seen at INR 268,000-INR 278,000 per kg

--COMEX silver seen at $72.00-$78.00 an ounce

End

 

US$1 = INR 96.82

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Saji George Titus

 

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