Gold and silver are likely to remain range-bound over the coming week, with a modest upward bias as a weaker rupee lends support to domestic prices, while investors weigh inflation data, Federal Reserve policy signals and geopolitical risks.
Investors will focus on inflation data from India, China and the US for fresh signals on the outlook for prices and financial markets.
Market sentiment will also hinge on China's trade figures and comments from Federal Reserve policymakers, which could shed light on the outlook for US interest rates and the timing of the central bank's next decision.
“The outlook remains range-bound with a mildly positive undertone, as rupee weakness provides a cushion against global price fluctuations,” Jateen Trivedi, vice-president and research analyst for commodities and currency at LKP Securities, said.
On the Multi Commodity Exchange (MCX), gold futures for December delivery rose Rs 1,109, or around 0.7%, over the past week to settle at Rs 1.51 lakh per 10 grams.
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Silver futures, meanwhile, fell Rs 122 to close at Rs 2.25 lakh per kg.
According to Trivedi, gold prices recovered on the back of a weaker US dollar, lower bond yields and improving geopolitical sentiment. A late-week decline in crude oil prices also eased concerns over inflation, while the rupee's depreciation supported domestic bullion prices.
A weaker rupee makes imported gold and silver more expensive in India, helping cushion domestic prices against a fall in international rates. Trivedi said this could limit the impact of a moderate correction in global gold prices on the domestic market.
In international markets, gold and silver prices ended the week higher, with gold futures on Comex rising $54, or around 1.3%, to settle at $4,216.30 per ounce. Silver futures gained more than 1% to close at $61.05 per ounce.
Gold prices recovered after slipping to around $4,066 per ounce, as investors bought the metal at lower levels, said Pranav Mer, senior vice-president for commodity and currency research at JM Financial Services. Prices climbed back above $4,200, with most of the gains coming in the final two trading sessions.
The recovery coincided with the US dollar holding around the 102 level and Treasury yields easing from recent highs, Mer said.
Silver also gained towards the end of the week, supported by gold's rebound and gains in industrial metals such as copper and zinc. However, concerns that high prices could put off buyers and prompt them to look for alternatives limited the metal's gains. The possibility of a supply surplus in 2027 could also weigh on prices, Mer said.
Geopolitical tensions remain another factor for bullion. Developments in the US-Iran conflict could influence demand for gold as a safe-haven asset, while changes in diplomatic signals and energy prices may affect market sentiment.
Next week, investors will watch inflation data and signals from the US Federal Reserve for clues on the direction of interest rates. Movements in the dollar and bond yields will also be important for global gold and silver prices, while the rupee's movement will influence domestic rates.
Both metals could remain volatile as investors weigh these factors. A clearer move beyond their current trading ranges may depend on fresh cues from economic data, central bank policy or geopolitics.
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