MCX silver falls over 0.8%, gold trades cautiously amid global volatility

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Gold traded cautiously while silver remained under pressure on India’s Multi Commodity Exchange (MCX) on May 21, as global bullion markets turned volatile amid shifting US interest rate expectations and developments around US-Iran negotiations.MCX silver extended losses in early trade, touching an intraday low of ₹2.71 lakh per kg, down ₹2,291 or 0.83%. Although the metal later recovered part of its losses, it continued to trade in the red and underperformed gold at the time of writing.The weakness tracked global trends, with spot silver declining nearly 0.8% to $75.40 per ounce.Gold prices, meanwhile, showed relatively limited movement despite fluctuations in international markets. Spot gold slipped 0.2% to $4,534.69 per ounce, while US gold futures for June delivery remained largely unchanged at $4,536.70 an ounce.Global bullion sentiment remained mixed after US President Donald Trump said negotiations with Iran were in the final stages, raising hopes of a possible peace agreement and reducing some safe-haven demand for precious metals.However, concerns over potential military escalation and supply disruptions in the Strait of Hormuz continued to support oil prices and inflation expectations.Analysts said the market was balancing easing geopolitical tensions against persistent inflation concerns, resulting in choppy price action across precious metals.Kelvin Wong, Senior Market Analyst at OANDA, said sentiment improved following signs of progress in US-Iran negotiations, but rising US Treasury yields continued to limit upside in gold prices. He noted that the broader trend in Treasury yields remained upward, reducing aggressive buying interest in non-yielding assets such as gold.Higher Treasury yields increase the opportunity cost of holding bullion, which typically performs better in a lower interest rate environment. Gold prices have fallen more than 14% since the Iran conflict escalated in late February, as elevated oil prices intensified inflation concerns and reinforced expectations that interest rates could remain higher for longer.Markets are pricing in the possibility of tighter US monetary policy later this year. According to CME Group’s FedWatch tool, traders currently see a 39% probability of a 25 basis-point rate hike in December.Minutes from the US Federal Reserve’s April meeting showed that a majority of policymakers believed additional po...

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