Crude Prices Ease, Gold And Silver Jump On Ceasefire Hopes
Gold had faced notable selling pressure since the conflict began, as rising energy costs fuelled inflation fears and strengthened expectations that central banks may keep interest rates elevated or tighten further”: Ajay Kedia, MD, Kedia Commodities.
CHENNAI: As the United States and Iran moved closer to a preliminary agreement that could end the ongoing conflict, crude oil prices eased and gold and silver rose from their recent lows on Wednesday.
A 14-point memorandum of understanding that would outline immediate steps to halt hostilities and initiate a 30-day negotiation window for a more comprehensive agreement, lifted the sentiments in the commodity market. However, the post by US President Donald Trump on Truth Social on attacks if Iran does not agree to ceasefire increased volatility in the market.
International crude oil futures plummeted, with WTI falling to $88.6 per barrel and Brent below $96.5, as the U.S. and Iran reportedly neared a ceasefire memorandum of understanding. In May WTI prices had touched $107.6 and Brent $115. However, after Trump’s tweet, WTI prices moved higher to $95 and Brent to $102. The continued US blockade on ships traveling to and from Iranian ports keeps supply concerns in focus, said Kedia Commodities.
Gold prices moved above $4720 per ounce on Wednesday. In May gold in the international market had seen a low of $4500 and on Wednesday, it made a high of $4722 per ounce. in the Multi Commodity Exchange, gold has moved in May from the lowest of level of Rs 1,48,760 per 10 gm to Rs 1,52,889. In the Delhi bullion market, gold moved up to Rs 1,55,400 per 10 gm on Wednesday from Rs 1,52,500 in the previous session.
“Gold had faced notable selling pressure since the conflict began, as rising energy costs fuelled inflation fears and strengthened expectations that central banks may keep interest rates elevated or tighten further,” said Ajay Kedia, MD, Kedia Commodities.
Silver prices too climbed to an intraday high of $77.81 per ounce in the international market against a low of $72.21 per ounce in May. In the MCX, silver prices moved up from Rs 2,41,113 per kg to Rs 2,55,409 on Wednesday. In the Delhi spot market, silver prices rose from 2,45,300 per kg to Rs 2,54,500 on Wednesday.
“If the crude prices remain around $90 levels despite a ceasefire, the US Federal Reserve will raise interest rates to curb inflation, and this will keep the gold and silver prices under control. Gold prices can move up to $5000 on the upside and $4350 in the lower side. Similarly, $90 and $70 could be possible levels for silver,” said Kedia.
