Gold and silver prices are expected to remain driven by developments in US-Iran negotiations, movements in crude oil prices, and a packed global macroeconomic calendar in the coming week, according to analysts quoted by news agency PTI.
Geopolitical Drivers: US-Iran Talks and Strait of Hormuz
Market participants will closely watch talks scheduled in Burgenstock, Switzerland, where US Vice President J D Vance is expected to lead discussions with Iranian officials following last week's framework agreement aimed at ending hostilities and reviving nuclear negotiations, the source reported. The outcome of the talks could influence global risk sentiment and energy markets, with a direct bearing on bullion prices, analysts said.
Pranav Mer, Vice President, EBG - Commodity & Currency Research at JM Financial Services Ltd, said, "Gold and silver momentum looks sideways/corrective as focus will remain on the negotiation between Washington and Tehran and also on the flow of crude oil, LNG and raw materials from the Strait of Hormuz." Meanwhile, Iran said it had closed the Strait of Hormuz following fresh Israeli strikes in Lebanon, though the US Central Command disputed the claim and said shipping through the strategic waterway continued uninterrupted, according to the source. The US-Iran framework signed last week has set a 60-day deadline for negotiators to reach agreement on technical details.
Price Action and Currency Impacts
Precious metals ended the previous week lower amid a strengthening rupee and easing safe-haven demand. On the Multi Commodity Exchange (MCX), gold futures fell Rs 3,325, or 2.2%, to settle at Rs 1.47 lakh per 10 grams. Silver futures dropped Rs 13,001, or 5.3%, to close at Rs 2.33 lakh per kilogram.
| Contract | Previous Week Close | Change | % Change |
|---|---|---|---|
| MCX Gold (per 10g) | Rs 1,50,325 | Rs 1,47,000 | -2.2% |
| MCX Silver (per kg) | Rs 2,46,001 | Rs 2,33,000 | -5.3% |
| Comex Gold (per oz) | Reference | USD 4,245.9 | +0.1% |
| Comex Silver (per oz) | Reference | USD 66.32 | -2.03% |
Jateen Trivedi, VP Research Analyst, Commodity and Currency at LKP Securities, noted, "Gold remained under pressure throughout the week, ending nearly 2.2 per cent lower as the precious metals faced headwinds from a combination of falling energy prices, a stronger Indian rupee, and a hawkish policy stance from the US Federal Reserve." A stronger rupee lowers the landed cost of imported gold, creating additional pressure on precious metals prices, he added.
In global markets, Comex gold futures edged up to close the week at USD 4,245.9 per ounce, while silver declined 2.03% to USD 66.32 per ounce in New York. Mer said bullion continued its corrective phase as international gold and silver prices were weighed down by a stronger US dollar, with the Dollar Index ending around 100.60. While the Russia-Ukraine conflict continued to lend some support to safe-haven demand, investor attention remained focused on developments in West Asia.
Macroeconomic Calendar Ahead
Apart from geopolitical developments, investors will track the People's Bank of China's policy decision on Monday, flash manufacturing and services PMI data from major economies, US housing data, Personal Consumption Expenditures (PCE) inflation numbers, and consumer sentiment readings. Commentary from Federal Reserve officials will also be closely watched for signals on the future interest-rate trajectory and its impact on bullion prices. Additionally, domestic commodity markets will remain closed during the morning session on Friday on account of Muharram.
The 60-day framework deadline and ongoing tensions keep the bullion outlook tethered to negotiations and energy flows, with technical corrections likely as long as the dollar remains strong and safe-haven demand ebbs.
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