Fed Decision, Oil Prices to Test Bullion Markets

The Federal Reserve's interest rate decision is set to test the gold and silver markets, which have been on a recovery path. The US-Iran conflict, oil price movements, and inflation expectations are key factors that will determine the direction of bullion in the coming week.

Analysts predict that market sentiment will be driven by developments in the US-Iran geopolitical situation, crude oil prices, and their impact on inflation expectations ahead of the Fed's policy decision on July 29. Jateen Trivedi, VP Research Analyst at LKP Securities, said that 'market sentiment will continue to be driven by developments in the US-Iran geopolitical situation, the direction of crude oil prices, and their impact on inflation expectations ahead of the US Federal Reserve's policy decision on July 29.'

The price of gold futures for August delivery rose Rs 2,200, or 1.6 per cent, to close at Rs 1.43 lakh per 10 grams during the last week. Silver futures for September delivery gained Rs 5,735, or 2.7 per cent, to Rs 2.22 lakh per kilogram on the Multi Commodity Exchange.

However, analysts warn that bullion prices may come under renewed pressure if the US-Iran conflict escalates further. Praveen Singh, Head of Commodities at Mirae Asset ShareKhan, said that gold and silver are likely to trade in a range as markets continue to monitor developments surrounding Iran.