Dollar and US-Iran Tensions Weigh on Gold, Silver Prices
Gold and silver prices are expected to remain volatile this week as the US dollar's value continues to impact sentiment. The Reserve Bank of India's monetary policy decision on Wednesday will also be closely watched by investors, with a 25 basis points rate hike anticipated.
On the global stage, Comex gold futures for December delivery fell $158.9, or 3.7%, to close at $4,162.3 per ounce last week. Silver dropped $4.38, or 6.7%, to $60.41 per ounce.
Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities, notes that a stronger US dollar and rising bond yields intensified profit-booking across bullion and other asset classes last week. Pranav Mer, Senior Vice President of EBG - Commodity & Currency Research at JM Financial Services Ltd., adds that broader weakness across commodities, a stronger dollar, and elevated yields amid signs of further rate hikes by central banks weighed on precious metals.
Some war-risk premium in bullion eased after reports pointed to increased oil flows from West Asia. However, mixed signals over escalation kept investors from making aggressive bets, Mer said. Trivedi cautions that any further escalation could revive safe-haven demand for bullion, but the lack of a clear direction on the geopolitical front is likely to keep prices in a two-way movement.