Gold, silver futures fall on global uncertainty

Gold and silver futures prices declined on Monday across domestic and international markets as stalled US-Iran negotiations and caution ahead of key central bank meetings weighed on sentiment, analysts said. Weak investor positioning and rising crude oil-driven inflation concerns further pressured bullion.

On the Multi Commodity Exchange (MCX), the most active June gold contract fell 0.3% to ₹1,52,244 per 10 grams, while on COMEX, the same-month contract declined 0.4% to $4,740.8 per ounce. Silver prices also tracked losses, with the MCX May contract down 0.6% at ₹2,43,135 per kg and COMEX silver falling 1.2% to $75.53 per ounce. 

Analysts attributed the decline to faltering geopolitical developments. Efforts to revive US-Iran peace talks stalled after Washington cancelled a planned diplomatic engagement, while Tehran reiterated its refusal to negotiate under existing restrictions. The resulting uncertainty around the Strait of Hormuz has heightened volatility in bullion markets, given its implications for energy prices and inflation.

Elevated crude oil prices have reinforced expectations that inflation could remain persistent, prompting central banks to maintain higher interest rates for longer. This has reduced the appeal of non-yielding assets such as gold and silver.  Market participants are now closely watching policy decisions from major central banks, including the US Federal Reserve, Bank of Japan, Bank of Canada, European Central Bank, and Bank of England. 

 Any hawkish signals could exert additional downward pressure on bullion prices. Positioning data also reflected weakening sentiment. Reports showed a decline in net-long exposure in both gold and silver, alongside rising short positions. 

— Informist