Gold to hold firm as traders await breakthrough

Global bullion sentiment will depend on geopolitical negotiations, inflation data, dollar movement and central bank buying

Business Desk

Mumbai

Gold and silver prices are expected to remain largely range-bound for the second straight week as investors closely monitor developments surrounding the US-Iran peace negotiations and key global economic indicators, analysts said.

Market participants are expected to track inflation data from China, Germany and the US, along with GDP figures from the Eurozone and the UK, for fresh cues on global economic conditions and interest rate expectations.

Analysts said bullion markets are currently balancing hopes of easing geopolitical tensions with concerns over fresh volatility in the Middle East. Pranav Mer of JM Financial Services said gold prices are currently moving in a consolidation phase, while silver may continue to witness positive momentum in the coming week. Traders will remain focused on progress in peace discussions between the US and Iran, as any breakthrough or escalation could directly impact bullion prices. 

On the MCX, gold futures rose ₹1,178 (nearly 1%) during the past week to settle at ₹1.52 lakh per 10 grams.  Silver surged ₹10,985, (4.4%) to close at ₹2.61 lakh per kilogram. Jateen Trivedi of LKP Securities said gold maintained a positive undertone despite volatility across global markets. Lower US Treasury yields and a weaker dollar index helped support prices. In the international market, Comex gold futures climbed nearly 2% last week to settle at US$4,730.7 per ounce, while silver gained 5.8% to close at US$80.86 per ounce.

Analysts pointed to continued central bank purchases and fresh inflows into global gold exchange-traded funds as supportive factors for bullion.  However, gains remained capped after renewed tensions surfaced in the Persian Gulf following clashes involving US and Iranian forces.  Investors will now closely watch further geopolitical developments, US economic data, inflation trends, rupee movement and trade figures for fresh direction in precious metal markets this week. 

(With inputs from PTI)