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Informist, Friday, May 22, 2026

By Reshma Ravi

MUMBAI – Futures contracts of gold and silver fell on the Multi Commodity Exchange of India on Friday as the rupee strengthened against the dollar, analysts said. Elevated oil prices and hawkish remarks from US Federal Reserve officials raised expectations for interest rate hikes by the Fed, weighing on the precious metals.

At 1601 IST, the most active June contract of GOLD was down 0.3% at INR 159,100 per 10 grams on the MCX. The same-month contract on the COMEX was down 0.4% at $4,525.9 per ounce. The most active July SILVER contract on the MCX was down 0.9% at INR 272,497 per kilogram, and the same-month contract on COMEX was down 0.3% at $76.53 per ounce.

The rupee on Friday closed at 95.6900, up 0.5% against the US dollar. When the rupee depreciates against the dollar, prices of gold and silver in the domestic market adjust as the precious metals are priced in rupees. 

Gold and silver prices also fell due to expectations of an interest rate hike by the US Federal Reserve, analysts said. Before the outbreak of the war in West Asia, market participants expected more interest rate cuts by the US Federal Reserve in 2026. "However, these expectations have largely been priced out of the market in recent weeks. Most recently, there has even been a shift toward the possibility of interest rate hikes," Commerbank said in a report.

Those expectations were further reinforced by a sharp increase in US producer prices in April, suggesting that inflationary pressures may be stronger than earlier estimated. Moreover, the US Fed officials indicated that additional policy tightening could become necessary if inflation remained persistently above the 2% target. "With this reassessment of Fed policy, the potential for a setback for gold is now rising in the event of a renewed escalation of the crisis in the Middle East (West Asia)," Commerbank said.

Precious metal futures were also down amid uncertainty about the ongoing ceasefire negotiations between the US and Iraq, analysts at Kedia Advisory said. Tehran indicated that the latest 14-point framework from the US helped narrow differences between both sides, but reports that Iran's Supreme Leader ordered keeping Tehran's uranium stockpile and a dispute over tolls in the Strait of Hormuz clouded the outlook for a breakthrough. "If the US-Iran peace deal is confirmed, it could be a big positive trigger for precious metals," Manoj Jain, director of Prithvi Finmart, said in a note. 

Outlook for the rest of the session:

--MCX gold seen at INR 157,000–INR 161,000 per 10 grams

--COMEX gold seen at $4,470–$4,560 an ounce

--MCX silver seen at INR 265,000-INR 276,000 per kg

--COMEX silver seen at $72.00-$80.00 an ounce

End

US$1 = INR 95.69

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

Edited by Saji George Titus

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