New Delhi: Gold and silver could remain on an upward trajectory next week after posting sharp weekly gains, with investors turning their attention to global inflation readings, expectations around US interest rates and geopolitical developments in West Asia.
Analysts expect bullion to retain a positive bias, although volatility could remain high as several major economic indicators are scheduled for release.
Bullion Outlook
Gold futures for October delivery gained ₹8,444, or nearly 6 per cent, over the week to settle at ₹1.51 lakh per 10 grams.
Silver futures for September delivery advanced ₹14,268, or nearly 7 per cent, to end at ₹2.31 lakh per kg on the Multi Commodity Exchange.
Pranav Mer, Senior Vice-President, EBG – Commodity & Currency Research at JM Financial Services, expects the momentum to remain favourable.
He sees gold potentially moving towards ₹1.57 lakh per 10 grams in the short term, while silver could advance towards ₹2.80 lakh per kg.
Overseas Gains
Precious metals registered even stronger gains overseas. December gold futures rose $292.7, or 7 per cent, during the week to finish at $4,399.7 an ounce.
September silver futures surged $5.71, or almost 10 per cent, to $63.50 an ounce.
The rally gathered strength after weaker-than-expected US labour market numbers increased expectations that the Federal Reserve could adopt a more accommodative monetary policy stance.
A softer US dollar also boosted demand for precious metals, helping gold record one of its strongest weekly performances in recent months.
Inflation Focus
The next major test for bullion will come from inflation readings across key economies.
Investors will monitor price data from the US, Germany, Japan and India for fresh clues on inflation trends and the outlook for monetary policy.
Chinese economic indicators will also attract attention, particularly for silver because of its extensive industrial applications.
West Asia
Geopolitical developments could add another layer of volatility. Investors will closely follow developments involving the US and Iran and broader efforts to reduce hostilities in West Asia.
Unexpected diplomatic progress could ease safe-haven demand, while renewed military tensions could provide fresh support to bullion.
Crude oil prices and movements in the US dollar will also remain important drivers.
Analysts expect gold and silver to remain highly sensitive to incoming economic data and geopolitical headlines, with the combination of inflation, Federal Reserve expectations and West Asia tensions likely to dictate the direction of the next leg of the rally.
