International News
Do nothing, When you do not know, what to do AUGMONT BULLION REPORT
Last week’s larger market sell-off, which was triggered by hawkish comments from U.S. Federal Reserve officials that dampened expectations for a December interest rate cut, caused gold prices to drop 2.5% and silver prices to drop 5.5%. In the meantime, the Federal Reserve is citing the shutdown blackout as justification for maintaining unchanged interest rates in December. Naturally, this is in line with the proverb, “Do nothing when you do not know what to do.”
Since the beginning of last week, the US dollar’s weakness and rumours that the Fed would resume asset purchases have served as catalysts for gold’s rise, but Thursday and Friday made it abundantly evident that this is no longer the case. Additionally, gold and silver faced pressure from position closing to meet margin calls brought on by declines in equity markets, which fell on Friday after the global selloff sparked by hawkish Fed signals. Market expectations for a 25 basis-point rate cut next month dropped to 42% from 64% earlier this week, down from more than 95% a month ago, according to CME Group’s FedWatch tool.
The longest U.S. government shutdown ended Thursday, creating a major data gap that left the Fed and traders flying blind ahead of next month’s policy meeting. The U.S. government shutdown lasted 43 days, the longest in history, but the effects will likely be felt for the next few weeks. Some economic data, such as October’s CPI numbers, will be lost forever because that information is collected manually. For economists, this could be a significant issue because economic modelling depends on reliable, consistent data.
In the end, inflation is not high enough to stop the Fed — especially as it continues to face pressure from President Donald Trump — from cutting interest rates, and even if the central bank skips the December meeting, rates will be lower in 2026. While there are clear signs that the U.S. labour market is losing significant momentum, even without October’s economic data, inflation is also not accelerating. One Federal Reserve meeting will not affect gold’s long-term fundamental support.
International News
MCX Gold, Silver Rise Despite Global Weakness; US Data, Iran Tensions Keep Bullion Markets On Edge
While Domestic Gold and Silver Prices Edged Higher On MCX, International Spot Gold Slipped Amid Uncertainty Over US-Iran Negotiations, Inflation Concerns
Gold and silver prices witnessed mixed momentum on May 28, with domestic futures on the Multi Commodity Exchange (MCX) trading marginally higher even as international spot gold prices remained under pressure. The divergence reflects cautious investor sentiment amid ongoing geopolitical tensions, uncertainty surrounding US-Iran peace negotiations, and expectations of tighter monetary policy in the United States.
MCX gold futures for June delivery rose modestly by Rs. 215 to Rs. 1,57,898 per 10 grams, while silver futures for July delivery gained Rs. 2,000 to trade at Rs. 2,72,628 per kilogram in early trade. The domestic uptick was supported by weakness in the US dollar and cautious positioning ahead of key macroeconomic developments.
However, global spot gold prices extended losses for a second consecutive session as investors remained wary of the inflationary impact of elevated energy prices and the possibility of prolonged geopolitical instability in the Middle East. Analysts noted that fading hopes of a near-term diplomatic breakthrough between the US and Iran have revived concerns around oil supply disruptions, higher crude prices, and inflation risks — factors that continue to influence precious metals.
According to market experts, gold has struggled to regain strong upside momentum despite its safe-haven appeal, as rising US bond yields and a firmer dollar have reduced investor appetite for non-yielding assets like bullion. Silver, meanwhile, remained under pressure globally after recent military developments in southern Iran weakened expectations of an immediate resolution to regional tensions.
Investors are now closely watching key US macroeconomic indicators, including ADP employment figures, GDP growth data, and the Personal Consumption Expenditures (PCE) inflation index — the Federal Reserve’s preferred inflation gauge. These data points are expected to offer fresh direction on the Fed’s interest rate trajectory, which remains a crucial driver for gold and silver prices.
With geopolitical risks still elevated and inflation concerns persisting, bullion markets are expected to remain volatile in the near term as traders await clearer signals on both diplomacy and monetary policy.
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