Gold and Silver Prices Navigate Geopolitical and Economic Crosscurrents
Gold and silver markets are entering a period of heightened volatility as escalating tensions in the Middle East and a series of crucial economic indicators create an uncertain outlook for precious metals. With the temporary ceasefire between the United States and Iran set to expire on April 22, 2026, investors are bracing for potential market disruptions that could influence safe-haven demand.
Fourth Consecutive Week of Gains for Bullion
According to Pranav Mer of JM Financial Services, gold has recorded gains for four consecutive weeks, supported by a softer US dollar and increased safe-haven buying amid global instability. Mer noted that frequent policy shifts by former US President Donald Trump regarding Iran have triggered sharp fluctuations across financial markets, adding to the volatility.
Exchange-traded fund investors have returned to precious metals after significant selling in March, while silver continues to draw support from improving sentiment in industrial metals like copper and expectations of another year of supply shortfall.
Muted Demand During Akshaya Tritiya Festival
Gold buying during the important Akshaya Tritiya festival remained subdued on Sunday, as record-high prices discouraged jewellery purchases despite a slight rise in investment-led demand. Amit Modak of PN Gadgil and Sons reported that the sharp price increase dampened jewellery demand, with consumers staying cautious even as retailers offered concessions on making charges.
In India—the world's second-largest gold consumer—futures prices ended at ₹1,54,609 per 10 grams on Friday, approximately 63 percent higher than levels seen during last year's Akshaya Tritiya. Surendra Mehta, national secretary of the India Bullion and Jewellers Association, told Reuters that demand was weaker than usual across most parts of the country, with only a few southern states showing better activity.
A Mumbai-based jeweller indicated that retail customers are increasingly opting for gold coins due to their easier resale potential, reflecting changing consumer preferences in the current high-price environment.
Key Economic Data and Geopolitical Developments in Focus
Market participants are closely monitoring several factors that could influence precious metals prices in the coming days:
- Inflation Data: Upcoming inflation readings from Japan and the United Kingdom, along with China's monetary policy decision, are seen as crucial triggers for bullion prices.
- US Economic Indicators: Retail sales, housing data, consumer sentiment figures, and preliminary PMI readings for manufacturing and services will provide insight into the Federal Reserve's potential policy direction.
- Geopolitical Tensions: The situation in the Strait of Hormuz remains fluid after Iran initially allowed commercial vessels to resume passage, only to later reinstate restrictions following Washington's continued blockade of Iranian ports.
- Domestic Developments: India's Ministry of External Affairs summoned the Iranian envoy to lodge a formal protest after two Indian-flagged oil tankers were forced to alter course in the Strait of Hormuz amid reported gunfire from Iranian forces.
Market Performance and Outlook
On the Multi Commodity Exchange of India, silver futures jumped by Rs 13,868, or 5.7 percent, over the past week to close at Rs 2.57 lakh per kilogram. Gold also advanced, rising Rs 1,957, or 1.3 percent, to settle at Rs 1.54 lakh per 10 grams.
Analysts are divided on whether the recent uptrend will continue or give way to a pullback. A high inflation scenario could discourage the US Federal Reserve from lowering interest rates, which typically weighs on gold prices. However, market participants are also watching the US Senate's confirmation hearing for Kevin Warsh as the next Federal Reserve Chair, scheduled for Tuesday. Warsh is expected to adopt a more accommodative monetary policy stance, which could provide additional support to gold and silver prices.
As gold and silver prices navigate these complex dynamics, investors are advised to monitor crude oil movements alongside the geopolitical developments in West Asia, which continue to create uncertainty in global financial markets.
