Bullion prices swung between gains and losses
Kaynat Chainwala,
AVP Commodity Research,
Kotak Securities
Mumbai, April 7, 2026: Bullion prices swung between gains and losses on Tuesday, caught between fleeting optimism from President Trump's claim that U.S.-Iran talks are "going well" and traders' caution over looming escalation risks. Spot gold hovered near $4,700 per ounce early in the session, propped up by China's central bank extending its gold accumulation streak into a seventeenth consecutive month and recording its largest single-month purchase in over a year during March, lifting total reserves to 74.38 million fine troy ounces. A brief rally that carried the metal above $4,700 the preceding session, triggered by ceasefire speculation proved short-lived and prices retreated below $4,650 as military rhetoric intensified and reports surfaced of U.S. preparations to target Iranian energy infrastructure; Silver tracked the broader softening, easing marginally to approximately $72.8 per ounce. This volatility has rippled into broader expectations, with markets now baking in a prolonged Fed pause as elevated energy prices threaten to stoke inflation and limit the central bank’s flexibility.
WTI crude oil surged past $116 per barrel as geopolitical tensions surrounding the Strait of Hormuz reached a critical inflection point, driven by an escalating exchange of threats between the US and Iran. President Trump's ultimatum, issued ahead of a Tuesday 8 p.m. ET deadline, warning of potential strikes on Iranian energy infrastructure, bridges, and power generation facilities, has injected a substantial risk premium into global energy markets. Iran's counter-threat to target Gulf energy assets in retaliation has further amplified market anxiety, pushing prompt spreads into deep backwardation of over $15 per barrel. Diplomatic channels have offered little relief, with Iran rejecting a proposed 45-day ceasefire in favor of permanent peace, full sanctions relief, reconstruction funds, and Hormuz access guarantees, terms that remain far outside the current scope of negotiation. If the standoff intensify and physical supply disruptions deepen, Brent crude prices could plausibly approach $120 per barrel.
