Gold and silver prices are currently exhibiting some weakness, but the domestic market has shown resilience, according to Vedika Narvekar, Research Analyst - Commodities & Currencies at Anand Rathi Shares and Stock Brokers. The broad consolidation phase for gold, which began in April, extended deeper into May as markets swung between headlines of US–Iran negotiations and renewed geopolitical uncertainty, constantly reshaping interest rate expectations.
Gold's Recent Performance
After rallying to record highs above $5,500 per ounce earlier this year, spot gold corrected sharply in March, remained volatile in April, and spent most of May stabilizing within a tight range of $4,450–$4,580 per ounce. The metal managed to recover nearly $150 from lows near $4,366 per ounce toward last week, supported by hopes of a diplomatic breakthrough between the US and Iran alongside a softer US Dollar Index. However, the rebound remained tentative rather than trend-defining. Elevated crude oil prices, sticky inflation, firm US Treasury yields, and fading expectations of near-term Federal Reserve rate cuts continued to pressure bullion and limit aggressive upside buying.
Domestic Gold Prices Resilient
For Indian investors, domestic gold prices remained comparatively resilient as persistent rupee weakness and a sharp hike in gold import duties during May kept local prices elevated despite global consolidation. India's gold demand has weakened sharply following the government's decision to raise gold import duty from 6% to 15%, taking the effective tax burden to 18.45%. Demand reportedly declined by nearly 70% to around 7.5 tonnes in the fortnight after the duty increase, compared with 25 tonnes during the corresponding period last year.
Gold Price Outlook: Focus for the Week
The market's attention this week will remain on developments surrounding US-Iran negotiations, the trajectory of oil prices, and incoming US macroeconomic data that could influence expectations for Federal Reserve policy. Friday's US Non-Farm Payrolls report will be the biggest trigger for gold this week, as strong job growth and rising wages could push Treasury yields and the US dollar higher, increasing pressure on gold prices. Markets are currently leaning toward this bearish scenario, with elevated real yields continuing to weigh on non-yielding assets like gold. Before the payrolls report, markets will also closely watch the ISM Manufacturing and Services PMI data.
Technical Levels & Near-Term Outlook
Gold (Spot) CMP: $4,460/oz
Support: $4,380 / $4,300
Resistance: $4,570 / $4,640
MCX Gold CMP: ₹1,59,054
Support: ₹1,56,000 / ₹1,53,100
Resistance: ₹1,62,700 / ₹1,65,200
Gold is stuck in a tight range after recording three consecutive monthly declines, weighed down by elevated bond yields, continued outflows from bullion-backed ETFs, and growing expectations that the Federal Reserve may need to maintain a hawkish stance to combat persistent inflation. Gold's near-term direction is range-bound, driven by the balance between slowing economic growth concerns and persistent inflation risks. At the same time, geopolitical uncertainty, central bank buying, and concerns over global growth provide an underlying floor for prices. Overall, gold's fundamental backdrop remains mixed, with softer US data likely to reinforce safe-haven demand, while resilient economic data could trigger renewed pressure on the metal.
Silver Price Outlook
For silver as well, the near-term bias remains weak due to macro backdrop. However, the long-term structural demand outlook remains positive, supported by growing usage in solar energy, electronics, EVs, and advanced technologies.
International Silver CMP: $74.50/oz
Support: $71.80 / $69.30
Resistance: $78.50 / $82.50
MCX Silver CMP: ₹2,65,100
Support: ₹2,55,600 / ₹2,46,700
Resistance: ₹2,79,500 / ₹2,93,700
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.
