COMEX gold rose more than 2 per cent on Monday, while silver gained over 3.5 per cent, helped by a weaker US dollar, lower oil prices and easing inflation concerns.
Gold was trading at $4,333.90 per ounce, up $95.10, or 2.24 per cent. Silver rose to $70.36 per ounce, gaining $2.39, or 3.51 per cent.
The rally followed reports that US and Iranian officials had reached a preliminary agreement to end the conflict in West Asia. Oil prices fell after the announcement, while the US dollar slipped to a 10-day low.
A weaker dollar usually supports gold and silver by making dollar-priced commodities cheaper for buyers using other currencies.
Why bullion gained
Precious metals were supported by:
- A softer US dollar.
- A sharp fall in crude oil prices.
- Lower inflation expectations.
- Reduced expectations of another US Federal Reserve rate hike.
- Improved sentiment after the US-Iran agreement.
Gold often gains when interest-rate expectations ease, as it does not offer yield.
Silver outperforms
Silver rose more than gold in percentage terms.
The metal benefited from safe-haven demand as well as expectations of better industrial use. Silver is used in solar energy, electronics and manufacturing.
Outlook
Precious metals may remain sensitive to:
- Developments in West Asia.
- US dollar movement.
- Oil prices.
- Federal Reserve policy expectations.
- Inflation data.
Analysts said gold still has longer-term support from fiscal deficit concerns, currency debasement risks and central bank buying.
For Indian investors, domestic bullion prices will also depend on the rupee’s movement against the dollar.
TL;DR:
Gold rose 2.24% and silver gained 3.51% as the dollar weakened and oil prices fell after reports of a US-Iran peace deal.
AI summary:
- COMEX gold traded at $4,333.90 per ounce.
- COMEX silver rose to $70.36 per ounce.
- A weaker dollar and lower oil prices lifted bullion.
- Softer inflation expectations reduced rate-hike fears.
- Outlook depends on West Asia and Fed policy.
