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Informist, Wednesday, May 27, 2026

 

By Reshma Ravi

 

MUMBAI – Futures contracts of gold and silver fell on the Multi Commodity Exchange of India and the COMEX Wednesday as renewed tensions between the US and Iran dampened the recent optimism about a potential peace deal, fuelling concern about a rise in inflation and higher-for-longer interest rates. Market participants now await the US personal consumption expenditures data for April, due Thursday, for further cues on US Federal Reserve monetary policy. 

 

At 1701 IST, the most active June contract of GOLD was down 1% at INR 155,979 per 10 grams on the MCX. The most active August gold contract on the COMEX was down 2% at $4,463.1 per ounce. The most active July SILVER contract on the MCX was down 2% at INR 265,252 per kilogram, and the same-month contract on COMEX was down 3% at $74.06 per ounce.

 

"...gold and silver prices held a loss, as fresh clashes in the Persian Gulf weighed on hopes for a US-Iran peace deal and reinforced concerns that inflation could keep interest rates higher for longer," Nirmal Bang said in a report. On Tuesday, Iran said the US had violated a ceasefire by striking targets near the contested Strait of Hormuz, potentially complicating efforts to bring the war to a close. "If there are new risks of escalation in the Iran conflict, the gold price tends to fall, as higher energy prices increase the risk of higher inflation and, consequently, rising interest rates. Since gold does not pay interest, the yellow metal becomes less attractive," Commerzbank said in a report. 

 

On Wednesday, Minneapolis US Federal Reserve President Neel Kashkari said that the Fed must focus on containing inflationary risks ‌that appear to be building, though it was "far too soon" to predict when it could next change interest rates. According to CME Group's FedWatch tool, market participants are pricing in a US Federal Reserve rate hike before the end of the year, with a 40% chance of a 25-basis-point hike in December. Typically, higher interest rates dim the appeal of the non-interest-bearing precious metal.

 

However, "any de-escalation generally has a positive effect on the gold price, which is why we expect the gold price to rise again by the end of the year," Commerzbank said.

 

Meanwhile, "We also expect corresponding upside potential for the price of silver in the event of de-escalation. However, even if the war were to end immediately, it would likely take some time for the situation to normalise," it said in the report.

 

Outlook for the rest of the session:

--MCX gold seen at INR 155,500–INR 159,500 per 10 grams

--COMEX gold seen at $4,440–$4,520 an ounce

--MCX silver seen at INR 264,000-INR 272,500 per kg

--COMEX silver seen at $72.00-$79.00 an ounce

 

End

 

US$1 = INR 95.69

 

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

 

Edited by Deepshikha Bhardwaj

 

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