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What is the story about?
Gold prices in India traded cautiously on Monday (May 18), even as global bullion markets showed signs of stabilisation after recent volatility driven by inflation fears, rising bond yields and geopolitical tensions in the Gulf.
On the Multi Commodity Exchange (MCX), gold futures were seen holding firm near intraday highs at ₹1.58 lakh per 10 grams, up ₹203 or 0.13%.
Silver, however, underperformed. MCX silver slipped below the ₹2.72 lakh mark to trade at ₹2.71 lakh per kg, down ₹605 or 0.22%.
Globally, bullion prices steadied after recent losses, with spot gold holding near $4,536.45 per ounce, following a drop to its lowest level in more than 1-1/2 months earlier in the session. US gold futures for June delivery also eased 0.5% to $4,539.90 per ounce.
The metal found limited support as investors assessed rising oil prices and a sharp selloff in global bond markets. Benchmark US 10-year Treasury yields climbed to their highest levels since February 2025, while Japanese government bond yields touched levels last seen in 1996, increasing the opportunity cost of holding non-yielding assets like gold.
“Longer-term interest rates potentially are on the rise, which indirectly creates a higher opportunity cost for holding gold,” said Kelvin Wong, senior market analyst at OANDA.
Geopolitical tensions added to market uncertainty after a drone strike triggered a fire at a nuclear power plant in the UAE, while oil prices climbed to a two-week high amid renewed concerns over disruptions in the Strait of Hormuz.
Despite these risk factors, analysts noted that expectations of higher interest rates continue to weigh on bullion sentiment. Markets are now pricing in a possible US Federal Reserve rate hike before year-end, with odds of a move by December hovering around 50%, according to CME FedWatch data.
Adding to the cautious tone, JP Morgan revised its 2026 average gold price forecast lower to 5,243 dollars per ounce from 5,708 dollars, citing weaker near-term demand and persistent rate uncertainty.
“Gold is stuck in a technical no-man’s land, above the 200-day moving average but capped below the 50-day moving average,” the bank said, highlighting that Fed policy expectations are keeping investors on the sidelines.
-With Reuters inputs
On the Multi Commodity Exchange (MCX), gold futures were seen holding firm near intraday highs at ₹1.58 lakh per 10 grams, up ₹203 or 0.13%.
Silver, however, underperformed. MCX silver slipped below the ₹2.72 lakh mark to trade at ₹2.71 lakh per kg, down ₹605 or 0.22%.
Globally, bullion prices steadied after recent losses, with spot gold holding near $4,536.45 per ounce, following a drop to its lowest level in more than 1-1/2 months earlier in the session. US gold futures for June delivery also eased 0.5% to $4,539.90 per ounce.
The metal found limited support as investors assessed rising oil prices and a sharp selloff in global bond markets. Benchmark US 10-year Treasury yields climbed to their highest levels since February 2025, while Japanese government bond yields touched levels last seen in 1996, increasing the opportunity cost of holding non-yielding assets like gold.
“Longer-term interest rates potentially are on the rise, which indirectly creates a higher opportunity cost for holding gold,” said Kelvin Wong, senior market analyst at OANDA.
Geopolitical tensions added to market uncertainty after a drone strike triggered a fire at a nuclear power plant in the UAE, while oil prices climbed to a two-week high amid renewed concerns over disruptions in the Strait of Hormuz.
Despite these risk factors, analysts noted that expectations of higher interest rates continue to weigh on bullion sentiment. Markets are now pricing in a possible US Federal Reserve rate hike before year-end, with odds of a move by December hovering around 50%, according to CME FedWatch data.
Adding to the cautious tone, JP Morgan revised its 2026 average gold price forecast lower to 5,243 dollars per ounce from 5,708 dollars, citing weaker near-term demand and persistent rate uncertainty.
“Gold is stuck in a technical no-man’s land, above the 200-day moving average but capped below the 50-day moving average,” the bank said, highlighting that Fed policy expectations are keeping investors on the sidelines.
-With Reuters inputs
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