Precious metals were trading higher on Friday, 12 June, as hopes strengthened over a possible peace deal between the US and Iran that could end the three-month-long conflict in West Asia and lead to the reopening of the Strait of Hormuz.
After closing lower for five consecutive sessions, the Comex gold futures contract jumped $154 per troy ounce to the day’s high of $4,267, attempting to recover part of its recent losses. Despite the rebound, the yellow metal remains on track for a second consecutive weekly loss.
Silver futures also regained strength, surging $4 per ounce to the day’s high of $68, which could snap a five-day losing streak if the gains hold through the close.
However, the white metal, which is more volatile than gold, is still heading for a fifth consecutive week of losses. The sustained decline has also pushed its year-to-date return into negative territory, down 4.3%.
After two days of missile exchanges in the Middle East, tensions eased after US President Donald Trump said on Thursday that he had called off planned military strikes on Iran, claiming progress in negotiations aimed at ending the conflict. He also said a peace deal with Iran could be signed as early as this weekend.
His remarks came just hours after he had threatened to escalate the situation by targeting Iran’s oil infrastructure.
Media reports suggested that the proposed memorandum of understanding between Tehran and Washington includes an extension of the ceasefire, the reopening of the Strait of Hormuz, and a framework for further negotiations on Iran’s nuclear programme.
However, Trump on Friday rejected those reports, accusing the Islamic Republic of not acting in “good faith” in its dealings with the US. Iran also dismissed the reports claiming that a final agreement had been reached.
Iran’s Fars News Agency, citing a source, reported that Iran’s negotiating team said reports claiming a final agreement had been reached between Iran and the United States were entirely inaccurate.
The report, citing the same source, added that Iran’s review and decision-making process has not yet been completed. Therefore, both the reported signing date of Sunday and the proposed venue of Geneva were categorically denied.
In terms of the latest economic data, US consumer sentiment rose in early June for the first time in four months as lower gasoline prices provided some relief for Americans grappling with a surge in inflation.
While gasoline prices are still above pre-war levels, the drop seen in recent weeks led Americans to be less pessimistic about their personal finances.
MCX gold, silver rebound after recent sell-off
Tracking gains in the international market, the near-month gold futures contract on MCX jumped ₹2,121 per 10 grams to the day’s high of ₹1,51,053. Silver futures on MCX also rebounded ₹5,645 per kilogram, crossing the ₹2.45 lakh mark to reach ₹2,45,500.
Despite today’s relief rally, silver remains down 1.43% for the week, putting it on track for a third consecutive weekly loss, while gold has declined 3.32% over the same period. In the previous week, both metals had slipped to their lowest levels since March 30.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
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