While reports suggest US and Iran continue discussions on extending the current truce and reopening the Strait of Hormuz, key disagreements remain unresolved and any final agreement still requires approval from President Trump. At the same time, Israel has expanded military operations against Hezbollah in Lebanon, keeping geopolitical risks elevated across the region. Despite gold’s traditional safe-haven appeal, the metal has struggled to gain momentum as higher crude oil prices continue to fuel inflation concerns.

Oil prices rebounded after Israel’s latest military actions, reinforcing fears that energy costs could remain elevated and force the Federal Reserve to maintain a hawkish stance. Markets are increasingly pricing in the possibility of a Fed rate hike later this year, while the US Dollar Index and Yields also strengthened.

On the data front, China’s private manufacturing PMI for May came in stronger than expected, supported by resilient domestic and export demand. This week, market participants will closely monitor PMI readings from major economies, US labor market data, and the RBI’s interest rate decision for further direction in precious metals, says Manav Modi Commodities Analyst Motilal Oswal Financial Services Ltd.