Precious Metals Enter Corrective Phase Amid Global Uncertainties
Gold and silver are anticipated to remain in a corrective phase over the coming week, with investors poised to closely monitor escalating tensions in the Middle East alongside a packed calendar of crucial global economic data for fresh directional cues. The interplay between geopolitical risks and macroeconomic indicators is expected to dominate market sentiment, influencing the trajectory of these safe-haven assets.
Geopolitical Developments and Fed Speeches to Drive Sentiment
Analysts cited by news agency PTI emphasized that speeches by US Federal Reserve Chair Jerome Powell on Monday, followed by commentary from other Federal Reserve officials later in the week, will be scrutinized for signals regarding future interest rate movements. These monetary policy cues are pivotal as they directly shape demand dynamics for non-yielding assets like gold and silver.
Pranav Mer, Vice President of EBG - Commodity & Currency Research at JM Financial Services Ltd, told PTI that geopolitical developments will remain central to market sentiment. "In the week ahead, focus will remain on developments in the Middle East—any sign of escalation or de-escalation may drive the financial market lower or higher," Mer stated. He highlighted that the worsening conflict, including threats and responses involving Iran, Israel, and the US, adds significant volatility to bullion prices.
Key Economic Data and Trading Calendar
Mer added that investors will also keep a close watch on manufacturing Purchasing Managers' Index (PMI) data from major economies, Consumer Price Index (CPI) readings from Germany and the Eurozone, as well as critical US indicators such as consumer confidence, nonfarm payrolls, and broader employment data scheduled for release later in the week.
Trading volumes in domestic commodity markets are likely to stay muted due to a shortened trading week. Markets will remain shut on March 31 for Shri Mahavir Jayanti and on April 3 for Good Friday, potentially amplifying price swings amid reduced liquidity.
Domestic Market Trends: Gold Slips, Silver Rises
In the domestic market, gold futures ended marginally lower at Rs 1.44 lakh per 10 grams over the past week, while silver closed higher by Rs 1,182, or 0.52 percent, at Rs 2.27 lakh per kilogram on the Multi Commodity Exchange (MCX).
Mer attributed the support for domestic bullion prices to persistent weakness in the Indian rupee against the US dollar. "The bullion prices in the domestic market have remained supported by persistent weakness in the Indian rupee against the dollar. Last week, the rupee fell more than 1 percent to close near 94.80," he explained. He also noted that the recent decline in bullion was driven by factors including ETF liquidation, soft physical demand, a stronger US dollar, and elevated US Treasury yields.
Global Market Performance and Outlook
In international markets, gold settled nearly 2 percent lower at $4,492.5 per ounce, while silver edged higher to $69.79 per ounce by the end of the week. Choice Broking observed that silver staged a notable weekly recovery after a prolonged spell of weakness, tracking a sharp rebound in global prices.
"Silver posted a strong weekly recovery after a prolonged decline, tracking gains in the global markets where prices rebounded sharply," the brokerage said. It added that weakness in US equity markets boosted safe-haven demand, though gold's traditional appeal showed signs of moderation amid rising Treasury yields and elevated oil prices.
Analysts told PTI that while there was temporary relief after US President Donald Trump signaled a 10-day pause on Iran's energy infrastructure attacks, the US dollar index remained near the 100 level, which limited gains in precious metals.
Short-Term Forecast and Supply Factors
For the week ahead, Choice Broking indicated that gold is likely to remain sideways-to-bullish during the shortened Easter week as traders assess key US economic data. Silver, meanwhile, is drawing additional support from robust Chinese physical demand.
China's silver imports surged to an eight-year high of 206.76 metric tonnes in the first two months of 2026, marking a 49 percent increase month-on-month and a staggering 5,910 percent rise year-on-year. This substantial uptick is tightening global supply and providing a firm foundation for silver prices, adding a fundamental layer to the metal's recovery narrative.
In summary, the precious metals market stands at a critical juncture, balancing geopolitical anxieties in the Middle East against a backdrop of pivotal economic data and central bank communications. The shortened trading week may introduce additional volatility, making investor vigilance paramount.
