Gold Dips, Silver Rises as West Asia Tensions Fuel Market Volatility

On the Multi Commodity Exchange (MCX), gold futures for June 5 opened marginally lower by Rs 43 at Rs 1,52,487 per 10 grams against the previous close of Rs 1,52,530.

Selling pressure intensified during the session, dragging the yellow metal down by Rs 638, or 0.41 per cent, to hit an intraday low of Rs 1,51,892 around 11 a.m. The intraday high stood at Rs 1,54,434.

In contrast, silver futures for July 3 witnessed gains in early trade. The white metal rose 1.14 per cent, or nearly Rs 3,000, to touch an intraday high of Rs 2,64,922 per kg.

At the time of filing the report, silver was trading at Rs 2,62,552, up Rs 630, or 0.24 per cent. The metal touched an intraday low of Rs 2,61,800.

According to commodity market expertsm the government's appeal comes at a time when elevated crude oil prices and uncertainty surrounding the Strait of Hormuz are increasing concerns over India's import bill and foreign exchange reserves.

"Gold prices fell in early morning trade after posting weekly gains, pressured by a firm dollar and elevated oil prices after President Trump rejected Iran's latest response to a US-backed peace proposal," he said.

Analysts believe the government is attempting to discourage non-essential gold imports at a time when rising crude oil prices are already expected to widen India's trade deficit and increase pressure on the current account deficit.

PM Modi made the appeal while addressing a BJP public meeting in Secunderabad on Sunday. He urged citizens to avoid non-essential gold purchases for the next one year to help reduce pressure on India's foreign exchange reserves amid the ongoing West Asia crisis.

Moreover, in the international market, COMEX gold was trading over 1 per cent lower at $4,678 per ounce, while silver was marginally up 0.04 per cent at $80 per ounce.

The volatility in precious metals comes amid heightened geopolitical tensions after US President Donald Trump reportedly rejected Iran's peace proposal.

According to reports, Iran had sent a proposal through Pakistan that included ending the conflict, reopening the Strait of Hormuz and resuming talks on its nuclear programme. However, differences between the two sides persisted over issues related to uranium demands, keeping tensions elevated.

Trump also posted on social media that he had reviewed the response from Iranian representatives and found it "unacceptable".

In addition, the rupee crashed 139 paise to 94.90 against the US dollar in early trade on Monday.

- IANS