Gold prices are anticipated to trade within a narrow range in the upcoming week as market participants closely monitor major central bank meetings, developments in US-Iran negotiations, and fluctuations in crude oil prices, according to analysts who spoke to the news agency PTI.
Central Bank Decisions in Focus
Investors will pay close attention to policy decisions from the Bank of Japan, the US Federal Reserve, and the Bank of England. Additionally, inflation data from the United Kingdom, the Eurozone, Germany, and Japan will be scrutinized for clues about the global interest rate trajectory.
US-Iran Deal Remains Key Driver
Analysts emphasized that the outcome of the proposed US-Iran agreement will be a major factor for bullion markets. Pranav Mer, Vice President at EBG - Commodity & Currency Research, JM Financial Services Ltd, stated, as quoted by PTI: "A close eye will remain on the finalisation of the US-Iran deal. If signed, then we may see an extended rally in risk assets that may lift gold and silver as well. However, any escalation would be negative for markets."
Domestic Market Performance
On the Multi Commodity Exchange (MCX), gold futures for August delivery declined by Rs 5,066, or 3.2%, during the week, settling at approximately Rs 1.50 lakh per 10 grams. Meanwhile, silver futures for July delivery dropped by Rs 2,351, or nearly 1%, to Rs 2.46 lakh per kilogram.
Jateen Trivedi, VP Research Analyst at LKP Securities, noted: "Gold prices declined sharply, falling more than 3 per cent and testing the Rs 1,48,000 per 10 gram level on the MCX." He attributed the volatility to easing concerns in energy markets and uncertainty surrounding US-Iran negotiations. However, sentiment improved later after reports indicated no immediate military action against Iran, prompting safe-haven buying and helping precious metals recover some losses.
Global Cues and G7 Summit
In international markets, Comex gold futures fell by USD 126.5, or nearly 3%, during the week to close at USD 4,238.8 per ounce. Silver declined by USD 1.13, or 1.6%, to USD 67.97 per ounce.
Mer added that gold recovered some losses towards the end of the week, rebounding more than 5% after the US dollar weakened and bond yields fell amid reports that a US-Iran peace agreement could be signed soon. Nonetheless, he cautioned that uncertainty would persist until both sides formally sign the agreement.
Continued liquidation by exchange-traded fund investors and expectations of a higher interest-rate environment at least through the first half of 2027 also weighed on bullion prices, he noted.
Analysts also highlighted that investors will track the G7 Summit in France, where leaders including Prime Minister Narendra Modi are expected to discuss conflicts in Iran and Ukraine, for further signals on the near-term direction of precious metals.
