Gold and silver prices are expected to remain on a positive trajectory next week as investors track inflation data, Federal Reserve policy expectations and geopolitical developments involving the US and Iran.
Key Highlights:
- Gold and silver are expected to extend gains next week.
- Inflation data from major economies will influence bullion prices.
- Gold futures rose nearly 6% during the week.
- Silver futures surged nearly 7% on MCX.
- Weaker US labour data boosted expectations of easier Fed policy.
- A weaker dollar supported fresh buying in precious metals.
- International gold futures gained 7% during the week.
- International silver prices jumped nearly 10%.
- US-Iran developments could trigger sharp bullion movements.
- Analysts expect elevated volatility in the coming week.
Gold and silver prices are expected to extend their recent gains next week, with inflation data from major economies and geopolitical developments likely to influence the direction of bullion markets.
Investors will closely track inflation figures from the US, Germany, Japan and India. Upcoming economic data from China will also remain important, particularly for industrial metals.
Analysts expect gold and silver to maintain a positive bias in the short term. Pranav Mer, Senior Vice President, EBG – Commodity & Currency Research at JM Financial Services, said gold could move towards Rs 1.57 lakh per 10 grams, while silver may approach Rs 2.80 lakh per kilogram.
On the domestic market, gold futures for October delivery climbed Rs 8,444, or nearly 6%, during the week to close at Rs 1.51 lakh per 10 grams.
Silver futures for the September contract also recorded strong gains, rising Rs 14,268, or nearly 7%, to settle at Rs 2.31 lakh per kilogram on the Multi Commodity Exchange.
Jateen Trivedi, VP Research Analyst, Commodity and Currency at LKP Securities, said gold witnessed a strong rally during the week, supported by weaker-than-expected US labour market data.
The softer US labour data revived expectations of a more accommodative monetary policy from the Federal Reserve. A weaker US dollar also encouraged fresh buying in precious metals.
In international markets, gold futures for December delivery jumped USD 292.7, or 7%, during the week to finish at USD 4,399.7 per ounce.
Silver futures for September delivery gained USD 5.71, or nearly 10%, to end the week at USD 63.50 per ounce.
According to Mer, gold broke out of its recent consolidation range and ended the week with gains of more than 6%. The rally was supported by a reversal in the US dollar and crude oil prices remaining in corrective mode, with oil falling close to USD 75 per barrel.
Geopolitical developments are also expected to remain a major factor for bullion markets. Trivedi said developments involving the US and Iran could influence prices, with any unexpected diplomatic or military announcement potentially triggering sharp movements when markets reopen on Monday.
Overall, volatility is expected to remain elevated in the coming week. US economic data, expectations surrounding Federal Reserve policy and ongoing geopolitical uncertainty are likely to keep gold and silver prices highly sensitive to global developments.
