Chennai: Gold and silver prices fell to seven week-low levels on Monday as US-Iran negotiations stalled, US dollar strengthened and crude oil price hike raised expectations for further interest rate hike by the US Federal Reserve.
On Monday gold prices fell from $4260 per ounce in the previous session to a low of $4150 and silver prices from $64 per ounce to $61.
In the Indian market, gold was trading Rs 1,50,000 per 10 gm and silver at Rs 2,28,000 per kg.
“Stalled US-Iran negotiations kept oil prices elevated and strengthened expectations for further Federal Reserve tightening.
President Donald Trump rejected Iran’s latest proposal to reopen the Strait of Hormuz, while saying he expected talks to resume this week.
Iran maintained that it would not soften its conditions for reopening the strategic waterway,” said Ajay Kedia, MD, Kedia Commodities.
This saw Brent crude prices jumping to $107.20 per barrel on Monday.
Dollar index climbed to around 101.1 on Monday.
Meanwhile, several Fed officials cited resilient economic growth and a robust labour market as reasons additional rate hikes could be necessary.
Market expects another rate hike in October to curb inflation.
“However, US President Donald Trump is likely to take steps to cool down crude prices as diesel prices are surging in the US and ahead of the mid-term polls, Trump will have to keep prices under control.
This increases chances of a ceasefire, and such a decision will once again cool crude prices and support gold and silver prices,” he said.
Kedia is bullish on the medium-to-long-term prospects of gold and silver. In the near term, if the tensions prevail, gold prices may drop to $4000 levels and silver to $58.50.
However, by the end of 2026, gold prices may be seen at $4850 and silver at $70.
This would take the metal prices to Rs 1,70,000 per 10 gm and Rs 2,48,000 per kg in the Indian market.
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: deccanchronicle.com
