Gold and Silver Prices Increase Marginally Amid Stabilizing Bond Yields

Precious Metals Recover from Lows as Bond Yields Stabilize

In Monday's trade on May 18, precious metals managed a smart recovery from the day's lows as bond yields stabilized after hitting multi-year highs last week, although gains remained capped amid rising fears of persistent inflation. COMEX gold futures rebounded by $27 per troy ounce to an intraday high of $4,588. Meanwhile, silver futures also recovered $1.08 to $78.62 per ounce after falling to an intraday low of $74.11. Over the last two trading sessions, the white metal was down by 15%.

Global Tensions Remain Elevated

The prolonged standoff between the United States and Iran has kept crude oil prices elevated, with Brent crude futures touching $112 per barrel in trade and surging over 80% so far this year. The two countries continue to hold negotiations aimed at ending the conflict, although Iranian media reports suggested the two sides remain deeply divided, with the US offering "no tangible concessions" during talks. The recent two-day summit between US President Donald Trump and Chinese President Xi Jinping ended without any concrete progress toward reopening the Strait of Hormuz.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Federal Reserve Meeting Minutes Expected to Influence Precious Metals

The upcoming Federal Reserve meeting minutes, due on Wednesday, are expected to dictate the near-term direction of precious metals. The minutes are likely to provide further insight into the Fed's last policy meeting, during which it decided to keep interest rates unchanged between 3.50% and 3.75%. However, analysts believe the impact of the minutes could remain limited following the recent macroeconomic data. Recent inflation reports showed that the consumer price index (CPI) climbed to 3.8%, while the producer price index (PPI) rose to 6.0%.

Domestic Market Update

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

In the domestic market, the near-month gold futures contract on the Multi Commodity Exchange (MCX) surged ₹1,679 per 10 grams to touch ₹1,60,266. Meanwhile, silver futures on MCX jumped ₹8,514 per kilogram to hit the day's high of ₹2,80,400 per kg. If the white metal sustains gains till the close, it will end its two-day losing streak. Over the previous two trading sessions, silver had cumulatively lost ₹28,352 per kilogram.