Bullion futures rebound as rupee hits record low

Gold and silver prices rebounded on Monday in the domestic futures market after declining for two consecutive sessions, supported by the Indian rupee falling to a record low against the dollar.

  However, rising inflation concerns and expectations of elevated global interest rates limited gains in precious metals.   On the MCX, the most active June gold contract rose 0.9% to ₹1,59,990 per 10 grams, while the July silver contract climbed 2% to ₹2,78,501 per kilogram. 

  In the international market, COMEX gold slipped 0.3% to $4,547.4 an ounce, while silver declined 1.5% to $76.37 an ounce. The rupee weakened to a lifetime low of 96.3875 against the dollar during Monday’s trade. However, traders remained cautious due to rising inflation fears linked to escalating geopolitical tensions in West Asia and elevated crude oil prices.   Market participants said concerns over persistent inflation could force global central banks, including the US Federal Reserve, to maintain higher interest rates for longer. 

The Indian government also imposed fresh restrictions on silver imports to reduce pressure on the rupee and foreign exchange reserves. Silver imports had surged 157% year-on-year in April to $411 million. Analysts expect MCX gold prices to trade between ₹1,56,000 and ₹1,61,000 per 10 grams in the coming week.

—Informist