Precious metals gold and silver are expected to stay under pressure in the holiday-shortened trading week, as investor sentiment will be influenced by a mix of geopolitical developments, central bank decisions, and key macroeconomic data, according to analysts.
Market Focus on US-Iran Peace Talks
Market participants are closely monitoring the progress of peace talks between the United States and Iran. Analysts note that the outcome could directly impact oil prices and safe-haven demand for precious metals. Pranav Mer, Vice President of EBG, Commodity & Currency Research at JM Financial Services Ltd, told PTI: "Focus in the coming week will remain on the progress in peace talks between the US and Iran, and their potential impact on oil, gold, and broader financial markets."
Central Bank Decisions in Spotlight
Attention will also turn to a series of central bank policy decisions, including those from the US Federal Reserve, Bank of Japan, Bank of England, and European Central Bank. The April 29 Federal Open Market Committee (FOMC) meeting, the last chaired by Jerome Powell, is expected to draw significant market attention.
Key US Economic Data Ahead
Investors will monitor a slate of US economic data, including housing numbers, Personal Consumption Expenditures (PCE) inflation, consumer confidence, and manufacturing activity readings from major economies due later in the week.
Domestic Market Performance
In the domestic market, gold futures on the Multi Commodity Exchange fell by Rs 1,910, or 1.23%, to end the week at Rs 1.54 lakh per 10 grams. Silver saw a sharper decline, dropping Rs 12,506, or 4.9%, to settle at Rs 2.44 lakh per kilogram. Analysts told PTI that the fall in gold was partially cushioned by weakness in the rupee, which depreciated around 1.4% over the week.
Global Market Trends
In global trade, Comex gold declined by $138.7, or 2.8%, to close at $4,740.9 per ounce, while silver slipped $5.4, or 6.6%, to $76.41 per ounce. Mer added: "Gold prices pared some of the recent gains last week after failing to breach past $5,000 per ounce in the international market and were weighed by multiple factors, including profit-booking after a gain of 10-12% in the previous four weeks."
Crude Oil and Dollar Impact
Crude oil prices surged above $100 per barrel after developments linked to the US-Iran blockade of the Strait of Hormuz added to supply concerns. According to analysts, sustained strength in the US dollar and firm Treasury yields also added pressure on bullion. Recent US data, including retail sales, jobless claims, and consumer sentiment, came in stronger than expected, further supporting the dollar.
Outlook for Precious Metals
Analysts expect gold to find some support at lower levels but remain exposed to further downside if the dollar continues to strengthen and geopolitical tensions ease. Silver may see higher volatility due to its dual sensitivity to industrial demand and safe-haven flows. However, any escalation in the Middle East, particularly around the Strait of Hormuz, or dovish commentary from major central banks could quickly revive demand for precious metals.
