Gold Prices Projected to Stay Range-Bound Amid Global Factors
Gold and silver prices are expected to remain stable with a slight upward trend next week, influenced by currency fluctuations and inflation data.
Gold futures rose nearly 1% last week, settling at ₹1.51 lakh per 10 grams.
Silver futures ended slightly lower at ₹2.25 lakh per kilogram, affected by market dynamics.
Investors will monitor inflation data and Federal Reserve signals for future price trends.
Gold and silver prices are anticipated to maintain a range-bound trajectory with a mildly positive bias in the upcoming week, according to analysts. The depreciation of the Indian rupee is expected to bolster domestic bullion prices amid ongoing global fluctuations. Investors are advised to keep an eye on inflation data from India, China, and the United States, which could provide critical insights into the future of precious metals.
The previous week saw gold futures for December delivery on the Multi Commodity Exchange (MCX) increase by ₹1,109, or nearly 1%, concluding at ₹1.51 lakh per 10 grams. Conversely, silver futures experienced a slight decline, dropping by ₹122 to settle at ₹2.25 lakh per kilogram. Analysts attribute gold's recovery to a weaker US dollar, lower bond yields, and improved geopolitical sentiment, while a decrease in crude oil prices has alleviated immediate inflation worries.
Jateen Trivedi, VP of research at LKP Securities, noted that the rupee's weakness raises the landed cost of imported bullion, which supports MCX gold prices even when international rates are under pressure. This currency effect is likely to cushion domestic prices against moderate corrections in global gold markets. In international markets, December gold futures on Comex surged by $54, or 1.3%, closing at $4,216.3 per ounce, while silver futures also gained over 1%, settling at $61.05 per ounce.
Bargain buying has played a significant role in supporting international gold prices, with weekly gains attributed to purchases at lower levels. Pranav Mer from JM Financial Services highlighted that gold futures saw a recovery from around $4,066 to above $4,200 per ounce, particularly in the last two trading sessions of the week. However, concerns about elevated prices potentially dampening demand remain, especially with expectations of a market supply surplus in 2027.
Geopolitical tensions, particularly the ongoing US-Iran conflict, continue to impact bullion prices. The situation escalated following US President Trump's remarks about potential military action against Iran-backed forces. As investors prepare for the upcoming week, they will closely analyze inflation reports, trade data from China, and comments from Federal Reserve officials, all of which are expected to influence the interest rate outlook and, consequently, precious metal prices.
