After ending the previous week on a stronger note, gold and silver are headed into a week packed with major domestic and geopolitical events. The US Federal Reserve's interest rate decision, movements in crude oil prices, and the evolving US-Iran conflict will be the key drivers for bullion, according to analysts.
Price Recap
In the domestic market, gold futures for August delivery settled Rs 2,200, or 1.6%, higher at Rs 1.43 lakh per 10 grams over the week on the Multi Commodity Exchange. Silver futures for September delivery also ended the week in positive territory, rising Rs 5,735, or 2.7%, to Rs 2.22 lakh per kilogram.
Global markets mirrored the trend. Comex gold futures for August delivery rose $52, or 1.3%, to $4,070.8 per ounce, while September silver futures advanced $3, or nearly 5%, to $58.90 per ounce in New York.
| Contract | Exchange | Previous Week Close | Current Week Close | Change | % Change |
|---|---|---|---|---|---|
| Gold Aug Futures | MCX | Rs 1,40,800/10g | Rs 1,43,000/10g | +Rs 2,200 | +1.6% |
| Silver Sep Futures | MCX | Rs 2,16,265/kg | Rs 2,22,000/kg | +Rs 5,735 | +2.7% |
| Gold Aug Futures | Comex | $4,018.8/oz | $4,070.8/oz | +$52 | +1.3% |
| Silver Sep Futures | Comex | $55.90/oz | $58.90/oz | +$3 | +4.99% |
Gold and silver recovered by the end of last week after witnessing sharp swings driven by developments in the oil market. According to analysts, Brent crude briefly reclaimed the $100-per-barrel mark after Houthi strikes on Saudi-owned vessels heightened fears of supply disruptions. As oil prices later retreated on profit booking, precious metals regained ground.
Fed and Macro Drivers
Market attention will not be limited to the Fed as investors will also be tracking US Consumer Confidence data, Core Personal Consumption Expenditures (PCE) inflation figures, weekly jobless claims, and monetary policy announcements from the Bank of England and the Bank of Japan. The Federal Reserve's policy decision is scheduled for July 29.
"Market sentiment will continue to be driven by developments in the US-Iran geopolitical situation, the direction of crude oil prices, and their impact on inflation expectations ahead of the US Federal Reserve's policy decision on July 29," said Jateen Trivedi, VP research analyst - commodity and currency at LKP Securities.
Traders will parse comments from Federal Reserve Chair Kevin Warsh after the policy decision for indications on the future path of US interest rates and the direction bullion prices could take.
Geopolitical Tensions and Oil
The evolving US-Iran conflict remains a central focus. Praveen Singh, head of commodities at Mirae Asset ShareKhan, said bullion is likely to remain range-bound as traders continue to monitor developments surrounding Iran. He also noted that China's central bank continued to add to its gold holdings in May, providing continued support from official-sector buying.
Apart from geopolitical developments, traders will keep a close watch on shipping activity through the Strait of Hormuz. Any disruption there could further impact crude oil prices and, by extension, precious metals.
Outlook
Analysts expect gold to remain sensitive to Fed rhetoric and crude oil dynamics. The combination of official-sector buying, geopolitical risk premiums, and inflation expectations suggests that bullion may stay supported, but near-term direction hinges on the Fed's stance. With key data releases and central bank decisions ahead, volatility is likely to persist.
For commodity traders and analysts, the interplay between the Fed's decision, the US-Iran situation, and oil market developments will determine whether gold can sustain its recovery above $4,070 per ounce or if profit-taking resumes.
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