Gold and silver prices are expected to continue their downward trend in the coming week, as investors closely monitor geopolitical developments, the US midterm election results, and key economic data. Analysts highlight that the outcome of the US midterm elections on November 3 and President Donald Trump's subsequent actions will be crucial in shaping market sentiment. Additionally, manufacturing and services PMI data from major economies, eurozone inflation figures, and US unemployment and nonfarm payrolls data later in the week will also influence precious metals.
On the Multi Commodity Exchange (MCX), gold futures for December delivery fell Rs 3,539, or 2.5 per cent, during the past week to close at Rs 1.38 lakh per 10 grams, while silver futures declined Rs 16,587, or 8.5 per cent, to Rs 1.79 lakh per kg. Jateen Trivedi, VP Research Analyst at LKP Securities, noted that gold witnessed a sharp correction last week, ending around Rs 1.38 lakh per 10 grams on the MCX. Despite some volatility and brief recovery, selling pressure intensified towards the end of the week.
Gold has faced cumulative selling pressure of over 6 per cent in the last three weeks, indicating persistent weakness in investor sentiment and a lack of sustained buying interest at higher levels. Overseas markets also reflected this weakness, with Comex gold futures for December delivery tumbling by USD 109, or nearly 3 per cent, to close the past week at USD 3,898.9 per ounce, while silver slumped USD 4.67, or nearly 9 per cent, to USD 49.27 per ounce. Pranav Mer, Senior Vice President at JM Financial Services Ltd, noted that bullion saw some liquidation following a sharp sell-off in global and US information technology stocks.
Crude prices have remained firm, with Brent crude rising above USD 114 and WTI crude close to USD 105 per barrel. Mer pointed out that bullion and oil have seen a strong negative correlation over the past 6 to 8 months. Trivedi added that developments surrounding US election-related uncertainty and tensions between Washington and Tehran could trigger intermittent demand for precious metals, although the broader price direction would largely depend on macroeconomic factors.