New Delhi, May 19: Gold prices rebounded by Rs 800 to Rs 1.63 lakh per 10 grams in the national capital on Tuesday, as signs of a breakthrough in US-Iran negotiations eased concerns over inflation pressure.
According to local marketmen, the yellow metal of 99.9 per cent purity rose Rs 800 to Rs 1,63,600 per 10 grams (inclusive of all taxes) from Monday's closing level of Rs 1,62,800 per 10 grams.
However, silver prices dropped by Rs 5,000 to Rs 2,71,000 per kilogram (inclusive of all taxes) due to weak industrial demand and subdued trends in the global markets.
Gold gains on easing geopolitical concerns
"Gold prices rebounded on Tuesday as hopes for renewed US-Iran negotiations improved, easing some concerns over prolonged energy-driven inflation pressures," Saumil Gandhi, Senior Analyst - Commodities at HDFC Securities, said.
Sentiment improved after US President Donald Trump said that he had suspended a planned military strike on Iran, indicating that a diplomatic resolution with Tehran might still be achievable, he added.
"The easing of geopolitical tensions led to a slight decrease in crude oil prices, which provided support to precious metals following recent sharp declines.
"Additionally, bargain buying and short covering in the aftermath of last Friday's significant sell-off have contributed to the recent recovery in precious metals," Gandhi said.
Silver declines amid weak demand
In the international market, spot gold was trading 0.47 per cent lower at USD 4,544.78 per ounce, while silver declined 2.01 per cent to USD 76.12 per ounce.
Spot gold prices are trading lower at around USD 4,540 per ounce as oil prices, though having eased slightly, remain elevated, Praveen Singh, Head of Commodities at Mirae Asset Sharekhan, said.
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Investors await FOMC minutes
Investors are now awaiting the minutes of the US Federal Open Market Committee (FOMC) meeting for further cues on the interest rate cycle and its impact on bullion prices, he added.
Singh said bullion prices may remain volatile in the near term amid uncertainty over global interest rates, crude oil prices and geopolitical developments in West Asia.
(Disclaimer: Except for the headline, this article has not been edited by FPJ's editorial team and is auto-generated from an agency feed.)
