Gold and silver prices traded with strong gains in Thursday’s session (30 July) as traders dialled back bets on further interest rate hikes after US inflation eased in June, triggering a sharp decline in the US dollar index and making precious metals more attractive to overseas buyers.
COMEX gold futures surged $144 per troy ounce to an intraday high of $4,180, while silver futures gained $1 to $59.17 per troy ounce. Both precious metals extended their winning streak to a second consecutive session.
The US dollar extended its losses against a basket of major currencies, falling to 100.3 on Thursday, its lowest level in nearly six weeks, after declining 0.6% in the previous session.
The weakness followed the release of the Personal Consumption Expenditures (PCE) Price Index—the Federal Reserve’s preferred inflation gauge—which fell 0.1% on a seasonally adjusted basis in June, taking the annual inflation rate to 3.7%. The reading was broadly in line with market expectations. The in-line inflation data eased concerns over an immediate interest rate hike.
The US Federal Reserve kept its benchmark interest rate unchanged at 3.50%-3.75%, while its outlook for inflation, unemployment, and economic activity remained largely unchanged from the June meeting.
The central bank reiterated that the Committee remains committed to restoring price stability but did not provide further clarity on how or when it may tighten policy further. As a result, traders reassessed the outlook for future rate hikes.
According to the CME Group’s FedWatch Tool, traders now see a 57% chance of a rate hike at the Fed’s 15-16 September meeting, down from about 77% before the Fed’s policy announcement. Higher interest rates typically weigh on non-yielding assets such as gold by increasing the opportunity cost of holding bullion.
Middle East tensions remain elevated
Meanwhile, geopolitical tensions remained elevated after US forces reportedly carried out fresh strikes on Iran on Thursday in response to attacks on American forces across the Middle East. In response, Iran’s Islamic Revolutionary Guard Corps (IRGC) threatened further escalation.
The IRGC also said it maintains “full control” of the Strait of Hormuz and warned that “a stranger who has come from thousands of kilometres away will not be allowed to interfere.” The latest strikes came just hours after US President Donald Trump vowed to hit Iran “very hard” following attacks on a military base in Jordan hosting US troops.
MCX gold and silver rebound
In the domestic market, the near-month MCX gold futures contract gained ₹1,620 per 10 grams to hit an intraday high of ₹1,43,400, extending its recovery after closing the previous session with a modest gain of ₹158.
The MCX silver futures contract also advanced nearly ₹3,000 per kg to touch ₹2,20,400.
Despite the latest rebound, both precious metals remain lower for the month so far. Gold is down around 0.5%, while silver has declined 3.75% in July.
If the current trend persists through the close of the month, gold will record its second consecutive monthly decline—the first such streak in nearly three years—while silver would post its second straight monthly loss for the first time in nearly two years.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
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