Gold Rises on Dollar Weakness, Silver Surges to 12-Year High

It seems to be a cheerful day in the bullion market as concerns over intensifying geopolitical tensions between Russia-Ukraine, uncertainty over the fate of the US economy amid tariffs and weakening growth and an easing dollar, came together to aid an increase in demand. To that effect, prices of the yellow metal witnessed an uptrend while those of silver hit a 12-year high on June 5.

Comex gold prices moved above $3,395 per ounce, while MCX (Multi Commodity Exchange) gold gained ₹500 to trade above ₹98,450 per kg on June 5.

As for silver, the commodity extended gains from the previous session when it hit a seven month high, and breached the $35 per ounce mark on Comex for the first time in 12 years. On the MCX, silver surged over ₹3,000 to cross ₹1,04,000 per kg, highlighting strong investor interest in precious metals.

“The broader sentiment in the bullion space remains positive, driven by geopolitical tensions and ongoing imbalance in global trade and financial dynamics,” said Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.

Bullion prices also gained favour after the US reported a weak ADP jobs report which showed that US private employers hired the fewest workers in over two years in May, heightening anticipation around Friday’s nonfarm payrolls report for more insight into the state of the labour market.

Adding to the worries, President Donald Trump renewed his call for interest rate cuts in a fresh jibe on Fed Chair Jerome Powell, which further boosted demand for the safe haven commodity.

On the geopolitical front, peace talks between Russia and Ukraine moving near a dead end also spooked investors to take shelter with the safe haven. This comes after Trump’s confirmation that  Russian President Vladimir Putin had vowed retaliation after Ukraine destroyed Russian strategic bombers in an undercover drone operation. As Putin labelled these attacks as ‘terrorism,’ investor hopes for a ceasefire between the two nations went for a toss.

Going forward, Trivedi expects gold to trade in a positive range between ₹97,000 and ₹99,500, with sentiment hinging on upcoming US economic data and geopolitical developments.