Gold and silver prices are expected to remain under cautionary watch due to ongoing geopolitical pressures, according to Vedika Narvekar, Research Analyst - Commodities & Currencies at Anand Rathi Shares and Stock Brokers. The precious metals market experienced significant pressure last week following a stronger-than-expected US jobs report, which showed payrolls increasing by 172,000 against forecasts of 85,000. This robust labor market data reinforced the belief that the Federal Reserve will maintain higher interest rates for an extended period, with markets now fully pricing in a rate hike by December. Consequently, Treasury yields and the US dollar surged, diminishing the appeal of non-yielding assets like gold. The decline was further exacerbated by profit-taking, liquidation of bullish positions by hedge funds, and broad-based weakness across precious metals and other risk assets. As a result, gold has erased all its gains for 2026, now down nearly 3% year-to-date, approximately 22% below pre-war levels, and more than 25% below the record highs seen in January.
The weakness has persisted into this week as geopolitical tensions in the Middle East escalated following Iranian strikes on Israel, driving oil prices higher. Under typical circumstances, such developments would bolster safe-haven demand for gold, but the market's focus has shifted squarely to inflation and interest rates. Meanwhile, underlying support from central bank buying remains intact, with China extending its gold-buying streak to 18 consecutive months and adding 8 tonnes in April. However, these supportive factors are currently taking a back seat to rising yields and tightening monetary policy expectations.
Focus for the Week
The primary event for gold this week is the US Consumer Price Index (CPI) inflation report. A hotter-than-expected inflation reading would reinforce concerns that the Fed may need to tighten policy sooner and more aggressively, likely pushing Treasury yields and the dollar higher while exerting further pressure on gold prices. Conversely, a softer inflation print could provide temporary relief by easing rate-hike expectations and triggering short covering. Markets will also closely monitor movements in crude oil, as sustained oil prices above $90 per barrel could keep inflation concerns elevated and limit any recovery in gold despite ongoing geopolitical risks.
Technical Levels & Near-Term Outlook
Gold (Spot)
CMP: $4,175 per ounce
Support: $4,070 / $3,850
Resistance: $4,380 / $4,500
MCX Gold
CMP: ₹1,49,600 per 10 grams
Support: ₹1,45,800 / ₹1,38,100
Resistance: ₹1,56,900 / ₹1,61,000
The near-term outlook remains cautious. Gold is currently facing a combination of rising real yields, a stronger US dollar, elevated Fed tightening expectations, and continued liquidation from speculative investors. Importantly, both gold and silver have now closed below their 200-day moving averages, a key long-term technical indicator that signals weakening momentum and warrants caution.
While central bank buying, geopolitical uncertainty, and potential safe-haven demand remain supportive longer-term factors, the market is currently being driven by the rates channel rather than the geopolitical channel. Unless inflation moderates meaningfully or economic data starts to weaken, rallies are likely to face resistance. Sustained trading below the 200-day moving average could expose gold to further downside pressure.
International Silver
CMP: $64 per ounce
Support: $61 / $58.50
Resistance: $69 / $72.50
MCX Silver
CMP: ₹2,34,900 per kilogram
Support: ₹2,24,400 / ₹2,15,300
Resistance: ₹2,53,840 / ₹2,66,716
Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India.
