Gold and silver markets brace for a volatile week ahead amid the government's latest curbs on silver imports, movement in crude oil prices and global uncertainty surrounding the US-Iran conflict, analysts said.
On the economic front, investors will closely track Chinese economic data, US housing numbers, PMI data, weekly jobless claims and minutes of the FOMC meeting, they added.
On the Multi Commodity Exchange (MCX), gold futures rose Rs 6,017, or 3.94%, during the past week to settle at Rs 1.58 lakh per 10 grams.
Silver futures also climbed Rs 9,964, or 3.8%, to close at Rs 2.71 lakh per kg.
"Gold traded with a strong positive undertone last week, gaining nearly 4% on MCX and closing around Rs 1,58,000. However, the rally was largely influenced by the recent 6% import duty hike, which significantly lifted domestic prices despite weakness in international markets," Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities, said.
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The silver import restriction doesn't mean India has shut the door; it means the entry is now guarded. "Supply isn't stopping, it's being channelled only through nominated agencies like RBI banks, DGFT-approved entities, jewellers via the bullion exchange." Two policy moves in three days point to forex management. Restricting silver imports eases immediate dollar outflow and reduces pressure on reserves, he added.
So while consumers will see higher domestic prices and wider spreads, the bigger play is about protecting the external account. Silver is just the instrument, forex is the driver, Trivedi said.
In contrast, international bullion prices remained under pressure last week.
Comex gold futures declined by $168.8, or 3.6% during the last week, to close at $4,561.9 per ounce.
Silver futures also slipped by $3.32, or 4.11% during the past week to settle at $77.54 per ounce.
"Gold prices took a breather last week and closed with a weekly loss, weighed by a sharp jump in the US dollar and bond yields globally - following higher than expected April inflation numbers released from most regions, including India, China, and the US, etc, raising bets that interest rate cuts are unlikely to come any time soon," Pranav Mer, Vice President, EBG - Commodity & Currency Research, JM Financial Services Ltd, said.
The bullion was also weighed as India, one of the world's biggest gold consumer - raised import duty, and took sharp measure to curb the bullion imports amid CAD concerns and curtail dollar purchases and outflow of foreign funds, he added.
However, oil prices have continued to move higher and up 8-10% on a weekly basis, holding steady above $100 per barrel amid lack of clarity on the peace deal between US and Iran, as cease fire and Hormuz blockade still remains, Mer said.
Analysts said rupee movement will also remain a key factor influencing domestic bullion prices, while fluctuations in crude oil and global macroeconomic developments could further shape market sentiment.
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Market participants will also watch the transition at the US Federal Reserve, with Kevin Warsh set to officially take over from Jerome Powell on Monday after Powell's eight-year term ends, they added.
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