Gold and silver prices in India saw a rebound on Tuesday, with MCX silver futures for September 2026 delivery rising by Rs 615 to Rs 2,18,333 per kg and gold futures for August 2026 delivery increasing by Rs 691 to Rs 1,41,000 per 10 grams. This comes after both metals experienced declines in the previous session, with gold down 0.20% and silver slipping 0.15%.
Investors are closely monitoring the upcoming U.S. consumer price index (CPI) data for June, expected later today, which could provide fresh insights into inflation trends and the Federal Reserve's policy direction. The recent weakness in bullion markets is attributed to geopolitical tensions, as the U.S. military conducted strikes against Iran, and two tankers were attacked in the Strait of Hormuz following President Donald Trump's announcement of reinstating a blockade on Iranian shipping.
The geopolitical tensions have led to a surge in oil prices, reaching their highest levels since mid-June, with a nearly 9% increase in the previous session. Concurrently, U.S. Treasury yields and the dollar have strengthened, reducing the appeal of non-yielding assets like gold.
Federal Reserve Governor Christopher Waller indicated on Monday that the central bank might need to raise interest rates if inflation remains above the Fed's 2% target, describing monetary policy as being at a 'crossroads.' This has heightened expectations of tighter monetary policy, with the CME Group's FedWatch Tool showing a 78% probability of a September rate hike, up from 57% a week earlier.
In international markets, spot gold fell 0.2% to $3,993.83 an ounce, while U.S. gold futures for August delivery remained steady at $4,000.70 per ounce. Spot silver declined 1.2% to $56.98 per ounce, with platinum and palladium also experiencing declines.
Manoj Kumar Jain of Prithvi Finmart advises traders to avoid new long positions in gold and silver at current levels, suggesting long-term investors consider accumulating through the SIP route. He identifies key support and resistance levels for both metals on the MCX.
Background
The recent geopolitical tensions and economic indicators have created volatility in the bullion markets. Historically, such tensions often lead to increased demand for safe-haven assets like gold, although current economic conditions and monetary policy expectations are exerting downward pressure.
As geopolitical tensions and economic indicators continue to influence market dynamics, investors should watch for the release of U.S. CPI data and Federal Reserve policy signals, which could further impact precious metal prices.
