Key facts
- Gold and silver prices surged over 2% on MCX following a preliminary US-Iran peace agreement.
- The agreement eased inflation fears and lowered expectations for further Federal Reserve rate hikes.
- Oil prices fell as the prospect of increased Iranian supply emerged.
- Silver futures on MCX rose Rs 7,200/kg, and gold futures climbed Rs 3,301/10 gm.
- Gold and silver ETFs rallied up to 8%.
Gold and silver prices surged over 2% on the Multi Commodity Exchange (MCX) following a preliminary peace agreement between the United States and Iran. The deal eased inflation fears and lowered expectations for further Federal Reserve rate hikes, while falling oil prices and softer yields also supported bullion.
Silver futures on MCX rose Rs 7,200 per kilogram, and gold futures climbed Rs 3,301 per 10 grams. Precious metal ETFs saw significant rallies, with silver ETFs jumping up to 8% and gold ETFs gaining between 2% and 4%. The Angel One Silver ETF led the gains among silver ETFs, climbing approximately 8%, while other silver ETFs like ICICI Prudential and Bandhan Silver ETF rallied up to 6%. Nippon India ETF Gold BeES and HDFC Gold ETF were each up 2%.
Analysts noted that the prospect of increased oil supplies pushed crude prices lower, easing fears of energy-driven inflation. This moderated expectations for further Fed tightening, with markets now pricing roughly a 49% probability of a rate hike by December, down from nearly 70% a week ago. Lower rate expectations, softer treasury yields, and a weaker dollar supported bullion prices.
The preliminary agreement reportedly includes the removal of US sanctions on Iran and the reopening of the Strait of Hormuz, a vital route for global energy supplies. The formal signing of this agreement is anticipated to take place in Switzerland on Friday. Jewellers reported improved customer footfalls and renewed buying interest, with expectations that investment demand for coins and bars will increase as prices surge.