- Gold and silver face volatility due to US-Iran tensions and inflation data from major economies
- Investors will watch inflation figures, US labor data, and Fed officials' comments for rate outlook
- US midterm elections and safe-haven buying boosted bullion midweek despite initial pressure
Gold and silver are expected to face a volatile week as investors weigh tensions between Washington and Tehran, fluctuations in crude oil prices and fresh inflation data from major economies for indications of where global interest rates may be headed, analysts said.
Bullion markets will take their cues from inflation figures due from China, the US, Germany, Japan and India, alongside US labour market data and remarks from Federal Reserve officials, as investors assess the outlook for monetary policy and the timing of potential interest rate adjustments.
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Tensions in the Middle East are likely to remain a key factor shaping precious metals markets. US President Donald Trump has confirmed further military strikes against Iran even as he said Washington had made significant headway in talks with Tehran, leaving markets uncertain over whether the conflict will intensify or give way to diplomatic efforts.
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Market participants will also watch developments in Russia-Ukraine peace negotiations, analysts said. "Gold's and silver's momentum remains down as investors will focus on the inflation data from China, the US, Germany, Japan, India, etc along with some Fed officials' commentary," Pranav Mer, senior vice president, EBG - commodity & currency research at JM Financial Services Ltd, said.
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He added that progress in negotiations aimed at ending the US-Iran conflict, alongside Russia-Ukraine peace talks, would remain important considerations for bullion traders.
On the domestic front, gold futures for December delivery on the Multi Commodity Exchange gained Rs 3,682 or nearly 3% over the past week to close at Rs 1.42 lakh per 10 grams. Silver futures advanced Rs 5,655 or 3.15% to settle at Rs 1.84 lakh per kilogram.
Internationally, Comex gold futures for December delivery rose $176 or 4.5 per cent during the week to finish at $4,074.9 per ounce. Silver futures climbed $2.6 or 5.4% to settle at $51.94 per ounce.
Mer said bullion initially came under pressure following stronger-than-expected US nonfarm payroll figures and improving consumer sentiment, developments that supported the dollar and pushed Treasury yields higher.
However, precious metals staged a sharp recovery midway through the week, supported by bargain buying at lower levels and short-covering. The rally also coincided with the US midterm election results, which saw Democrats secure major victories in both chambers of Congress, adding to market uncertainty.
Safe-haven buying following weakness in global technology, artificial intelligence and data centre stocks, particularly in the US, further supported the recovery. However, gains were partly constrained by weakness in industrial metals, including copper.
Despite the weekly advance, gold and silver faced renewed selling pressure on Friday, with international prices ending the session around $4,074 and $52 per ounce respectively.
Domestic bullion prices will also be shaped by movements in the rupee, fluctuations in international markets and buying interest during the Diwali season. Trading on the domestic commodities exchange will be suspended during Tuesday's morning session in observance of Diwali-Balipratipada.
The coming week is likely to test bullion's resilience, with investors weighing geopolitical risks against inflation trends and signals from major central banks before taking fresh positions in gold and silver.
(With inputs from PTI)
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