Gold, Silver Face Another Volatile Week, West Asia Tensions & Oil Surge Cloud Bullion Outlook
· Free Press Journal
Mumbai: Gold and silver are likely to remain volatile and could stay under pressure in the coming week as investors track the worsening conflict in West Asia, rising crude oil prices and a packed calendar of global economic data.
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Analysts said the direction of precious metals will largely depend on geopolitical developments, US interest-rate expectations and fresh economic indicators from major economies.
Conflict in focus
The latest escalation came after the US carried out fresh airstrikes on Iran following attacks on American-linked installations in Jordan. The renewed tensions have increased uncertainty across financial markets and pushed crude oil prices sharply higher.
Bullion Outlook Next Week, US-Iran Talks & Crude Oil Prices To Drive Gold-Silver TrendPranav Mer, Senior Vice President, EBG – Commodity & Currency Research at JM Financial Services, said gold remains in a corrective phase as traders await the US Federal Reserve's meeting later this month. However, any major development in the US-Iran conflict could quickly influence bullion prices.
Stronger dollar weighs
On the Multi Commodity Exchange (MCX), August gold futures declined by Rs 2,572, or nearly 2 percent, to close at Rs 1.40 lakh per 10 grams during the week. September silver futures fell Rs 6,261, or 2.8 per cent, to Rs 2.16 lakh per kilogram.
Jateen Trivedi, Vice President – Research Analyst, Commodity & Currency at LKP Securities, said a stronger US dollar, firm crude oil prices and expectations of higher interest rates continued to pressure bullion. He added that every recovery in gold witnessed fresh profit-booking, while the rupee's weakness failed to provide meaningful support.
Global cues ahead
In international markets, Comex gold fell 2.3 per cent to USD 4,018.8 an ounce, while silver tumbled 6.4 per cent to USD 56.32 an ounce over the week.
Gold, Silver Outlook Next Week, MCX Gold Falls 2.65% & Silver Slides 6.2% As US-Iran Tensions, Inflation Data Remain In FocusPraveen Singh, Head of Commodities at Mirae Asset ShareKhan, said hawkish comments from Federal Reserve Chair Kevin Warsh have outweighed softer US inflation data, strengthening expectations of tighter monetary policy.
Markets will now closely watch US weekly jobless claims, flash PMI readings, policy decisions in Europe and economic data from China. Analysts believe any fresh geopolitical flare-up or renewed US-China tensions could revive safe-haven demand for gold and silver.