Gold and Silver Prices Surge Sharply, Indian Citizens Urged Not to Buy
Gold prices have reversed to a slight gain while silver has surged. This price increase occurs amid investors monitoring developments in diplomacy between the United States and Iran and awaiting important US inflation data to be released this week.
According to Refinitiv, gold prices closed on Monday (11/5/2026) at US$4,734.09 per troy ounce, up 0.42%. This strengthening extends the positive trend for gold, which has risen 1.04% over the last two days.
Gold prices are still strengthening today. On Tuesday (12/5/2026) at 06:29 WIB, gold prices stood at US$4,751.7, up 0.37%.
“There is bargain hunting action and position adjustments ahead of the release of US inflation data this week,” said Jim Wyckoff, market analyst at American Gold Exchange, quoted from Refinitiv.
Market focus is on the US Consumer Price Index (CPI) data to be released on Tuesday and the Producer Price Index (PPI) scheduled for Wednesday.
From a geopolitical perspective, President Donald Trump’s quick rejection of Iran’s response to the US peace proposal has raised concerns that the 10-week conflict will continue. This situation continues to disrupt shipping through the Strait of Hormuz and is pushing oil prices higher.
“This impasse makes the timeline for achieving a ceasefire increasingly uncertain and keeps inflation risks high, thereby reinforcing the narrative of high interest rates persisting longer, which has been weighing on gold,” wrote ING analysts.
ING forecasts that gold prices could still rise to US$5,000 per troy ounce by the end of the year, although stalled peace negotiations increase short-term uncertainty.
Several global brokerage firms are also beginning to reduce expectations for US interest rate cuts. Projections are now split between limited easing and a scenario of no rate cuts at all in 2026.
Although known as a safe-haven asset, gold remains vulnerable to pressure when interest rates are high because the opportunity cost of holding a non-yielding asset becomes greater.
The market is also monitoring US President Donald Trump’s two-day visit to China this week, where he is scheduled to meet President Xi Jinping to discuss Iran, Taiwan, artificial intelligence, and nuclear weapons.
Indian Citizens Urged to Reduce Gold Purchases
Elsewhere, shares of jewellery retail stocks in India fell after Prime Minister Narendra Modi urged the public to postpone gold purchases for one year to preserve the country’s foreign exchange reserves. India is the world’s second-largest gold consumer.
India imports nearly 85% of its crude oil needs. Every time oil prices surge sharply, India has to spend far more US dollars to buy energy from abroad.
At the same time, India is also one of the world’s largest gold importers. This means the country is simultaneously importing two very expensive commodities—oil and gold—and paying for both in US dollars.
This is where the role of the Indian Rupee becomes crucial.
The Indian Rupee has been under significant pressure due to rising crude oil prices and concerns that India’s import bill will swell further if the crisis in West Asia worsens. The currency has recently weakened approaching its all-time low and was trading around 94.9 per US dollar on Monday, amid concerns over oil prices and global uncertainty.