If you are thinking of investing in gold or silver, then there may be fluctuations in the market next week. Experts say that the increasing tension between America and Iran, changes in crude oil prices and economic data coming from major economies of the world will decide the direction of the bullion market.
Focus will be on Fed policy and economic data
According to analysts, next week the PMI of manufacturing and services sector of America, Europe and other major countries, inflation data of Eurozone, non-farm employment (Non-Farm Payroll) and unemployment data of America will be very important for investors. These data will indicate what stance the US Federal Reserve may take regarding interest rates going forward.
America-Iran tension can also increase instability
The market will also keep an eye on the increasing military tension and stalled talks between America and Iran. If the tension between the two countries increases further, it may affect the prices of crude oil, which may also have a direct impact on the prices of gold and silver.
Big fall in gold and silver last week
According to Pranab Mer, Vice President (Commodity and Currency Research), JM Financial Services, at present both gold and silver are going through a ‘correction’ phase and the prices remain weak.
In the international market, gold fell by about 3.5% on Comex last week and closed at $ 4,096.3 an ounce. There was a huge fall of 10.7% in silver and it reached $ 59.67 per ounce.
On the domestic futures market MCX, gold for August delivery fell by about 2.06% and closed at Rs 1.44 lakh per 10 grams. Whereas silver for September delivery fell by 6.4% to Rs 2.23 lakh per kg.
Strong dollar and cheap crude oil became the reason
Research Analyst Jatin Trivedi of LKP Securities says that due to the strength of the US dollar, there was continuous pressure on gold. Apart from this, the nearly 10% fall in crude oil prices reduced concerns about inflation, which weakened the demand for gold as a safe haven.
Gold may get support due to these reasons
However, buying in gold was seen at lower levels on Friday after US personal consumption expenditure (PCE) inflation data came in softer than expected. Apart from this, factors like continuous purchase of gold by China’s central bank, tension between America and Iran and US President Donald Trump’s warning of imposing 100% duty on the European Union can provide some support to gold prices.
Overall, fluctuations in the gold and silver market are likely to remain sharp next week. In such a situation, investors should keep an eye on global developments and economic data.
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