Comex Gold Posts $64 per Ounce Gain, Silver Jumps $1.20 per Ounce Amid Oil Price Decline and Weaker US Dollar

Precious Metals Rebound Amid US-Iran Ceasefire and Weakening Dollar

Precious metals experienced a significant rebound on Tuesday, May 5, as a sharp decline in crude oil prices and a weakening US dollar supported fresh safe-haven buying. The US-Iran ceasefire, which remains in place despite recent tensions, also contributed to the positive sentiment in the market.

The COMEX gold futures rallied $64 per troy ounce to an intraday high of $4,697, recovering from a more than one-month low hit on Monday. Silver prices also rebounded, gaining $1.12 to $74.64 per ounce, after a near 2% drop in the previous session.

The fragile truce between the US and Iran was put to the test in recent days, with clashes in the Gulf and competing claims for control of the Strait of Hormuz. However, US Defense Secretary Pete Hegseth stated that the truce, which began just under a month ago, is still holding, with two US commercial vessels safely transiting through the Strait with military support.

Read also: Gold and Silver Prices Decline Amid Strengthening Dollar and Inflation Concerns

In related developments, Iranian Foreign Minister Abbas Araghchi expressed cautious optimism, stating that talks were "making progress" but warned that the US and the United Arab Emirates "should be wary of being dragged back into a quagmire."

The US dollar cooled after surging for two consecutive sessions, as tensions between the US and Iran showed signs of easing. The dollar's decline had a positive impact on precious metals, which are often seen as a safe-haven asset.

US Federal Reserve Policy Expectations

The US Federal Reserve is widely expected to keep the federal funds rate unchanged through the rest of the year, with markets pricing in roughly a 50% chance of a quarter-point hike in early 2027. Many global brokerage firms now expect no rate cuts from the Federal Reserve this year, following the Fed's decision to leave rates unchanged in its most divided decision since 1992.

Read also: Gold and Silver Prices in India: A Review of Current Rates Across Major Cities

Precious Metals Market Performance

Tracking the recovery in the international market, the near-term gold futures contract on the Multi Commodity Exchange (MCX) gained ₹1,101 to hit the day's high of ₹1,50,440 per 10 grams. In contrast, silver futures on MCX rose ₹3,455 per kg to reclaim the ₹2.47 lakh mark and touch an intraday high of ₹2,47,350 per kg.