Gold, Silver Expected to Rally This Week Amid Inflation Data, West Asia Tensions

Analysts expect gold and silver to continue their upward trend this week, driven by inflation data from major economies and efforts to end the conflict in West Asia. Last week, gold futures for October delivery rose nearly 6%, while silver futures for September surged about 7%.

The prices of both precious metals rose significantly last week (August 3-8) in the Indian market, with gold reaching a record Rs 1,59,820 per 10 grams and silver touching Rs 4,20,048 on MCX. The rally is expected to continue this week, with Pranav Mer, senior vice-president of EBG - commodity & currency research at JM Financial Services, predicting prices to move up towards Rs 1.57 lakh per 10 grams and Rs 2.80 lakh per kg in the short term.

The weaker US dollar also played a key role in supporting the rally in both metals, triggering fresh buying in precious metals. According to Jateen Trivedi, vice-president of research analyst at LKP Securities, 'gold witnessed a strong rally this week, gaining nearly 6 per cent, as weaker-than-expected US labour market data revived expectations of a more accommodative monetary policy from the Federal Reserve.'

With several major economies expected to release inflation data this week, including the US, Germany, Japan, and India, volatility is expected to remain elevated in the coming week.