Mumbai: Gold and silver prices are likely to witness sharp fluctuations this week as investors track global inflation data, geopolitical tensions and crude oil movements for fresh market direction.
Precious metals could remain sensitive to developments involving the United States and Iran, while expectations surrounding interest rate decisions by the US Federal Reserve may influence investor sentiment.
Inflation Watch
Investors will closely monitor inflation figures from India, China, the US, Germany and Japan to assess the future direction of monetary policy.
Upcoming US employment data and comments from Federal Reserve officials could also influence gold and silver prices by affecting the dollar and bond yields.
Higher interest rates generally reduce the appeal of non-yielding assets such as gold.
Geopolitical Risks
Escalating tensions between Washington and Tehran remain a major concern for bullion investors.
US President Donald Trump has confirmed additional military strikes against Iran while suggesting progress in diplomatic negotiations.
Meanwhile, developments surrounding Russia-Ukraine peace talks could influence demand for safe-haven investments.
Any escalation in geopolitical tensions may support precious metal prices, while signs of easing tensions could limit gains.
Domestic Markets
On the Multi Commodity Exchange (MCX), December gold futures climbed ₹3,682, or nearly 3 per cent, last week to settle around ₹1.42 lakh per 10 grams.
Silver futures advanced ₹5,655, or 3.15 per cent, closing near ₹1.84 lakh per kilogram.
Both metals recovered despite pressure from a stronger US dollar and rising Treasury yields.
Global Recovery
International bullion markets recorded stronger weekly gains.
COMEX December gold futures surged $176, or 4.5 per cent, to $4,074.90 per ounce.
Silver futures jumped $2.60, or 5.4 per cent, to settle at $51.94 per ounce.
Analysts attributed the recovery to bargain buying and short-covering after initial weakness triggered by stronger US employment figures.
Market participants will now watch economic indicators and geopolitical developments for clearer price direction.
The combination of inflation uncertainty and geopolitical risks could keep bullion trading volatile throughout the coming week.
