Bullion prices are expected to remain under pressure in the coming week as investors monitor the evolving US-Iran conflict, crude oil movements, and inflation data for insights into interest rate trends. Analysts highlight the importance of inflation reports from major economies like China, the US, Germany, Japan, and India, along with speeches from Federal Reserve officials and US employment figures. Chinese economic indicators will also play a crucial role in shaping the outlook for industrial metals.
Geopolitical tensions remain a significant factor, with US President Donald Trump confirming fresh military strikes on Iran while claiming progress in negotiations. Investors will also watch developments in peace talks between the US and Iran, as well as Russia-Ukraine negotiations. The domestic commodities market will be closed during the morning session on Tuesday due to Diwali-Balipratipada.
Pranav Mer, Senior Vice President at JM Financial Services Ltd., noted that gold and silver's downward momentum will persist as investors focus on inflation data and Fed commentary. On the Multi Commodity Exchange, gold futures for December delivery rose ₹3,682, or nearly 3%, over the past week to close at ₹1.42 lakh per 10 grams. Silver futures increased ₹5,655, or 3.15%, to settle at ₹1.84 lakh per kilogram.
Internationally, Comex gold futures for December delivery advanced $176, or 4.5%, during the week to close at $4,074.9 per ounce. Silver gained $2.6, or 5.4%, to settle at $51.94 per ounce. Mer attributed the initial pressure on bullion prices to stronger-than-expected US nonfarm payroll data and improving consumer sentiment, which boosted the dollar and Treasury yields. However, prices ended with a strong weekly gain of over 4% in global markets following the US midterm election outcome, which saw Democrats sweeping wins in both the Senate and the House.
Analysts noted that precious metals recovered during the week due to bargain buying at lower levels and short-covering, although gains were limited by a correction in industrial metals, particularly copper. The rally was also supported by safe-haven demand following a decline in AI, data center, and technology stocks in global markets, particularly in the US. However, bullion futures faced selling pressure on Friday, with gold and silver closing around $4,074 and $52 per ounce, respectively.
In the domestic market, prices could experience moderate fluctuations, influenced by global cues, currency movements, inflation trends, and festive demand around Diwali.