The direction of gold and silver prices next week will largely depend on global developments. Analysts believe that the bullion market may trade in a limited range amid monetary policy meetings of the world’s major central banks, progress in US-Iran talks and fluctuations in crude oil prices.
Investors will especially keep an eye on the meetings of the Bank of Japan, the US Federal Reserve and the Bank of England. Apart from this, inflation data from Britain, Eurozone, Germany and Japan can also play an important role in deciding the direction of the market.
America-Iran agreement will become a big factor
According to experts, the progress towards a possible agreement between the US and Iran will also affect the prices of gold and silver. According to Pranab Mer, Vice President of EBG-Commodity and Currency Research Department of JM Financial Services, if the agreement is signed between the US and Iran, then the risk taking trend in the global markets may increase. At the same time, any kind of new stress can attract investors towards safe investment options, which can provide support to gold and silver.
Fall in gold and silver in domestic market
Last week, there was weakness in the prices of both gold and silver in the domestic market. On Multi Commodity Exchange (MCX), the futures price of gold for August delivery fell by Rs 5,066 or 3.2 percent and closed at around Rs 1.50 lakh per 10 grams.
At the same time, the futures price of silver for July delivery fell by Rs 2,351, or about 1 percent, to Rs 2.46 lakh per kg. Jatin Trivedi, Commodity and Currency Analyst of LKP Securities, said that during the week, a sharp decline was recorded in gold prices and the August futures contract slipped to the level of Rs 1.48 lakh per 10 grams.
Pressure in international market also
There remained pressure on the prices of gold and silver in the international market also. The futures price of gold on Comex fell by $ 126.5 or about 3 percent during the week and closed at $ 4,238.8 an ounce, while the price of silver fell by $ 1.13 or 1.6 percent to $ 67.97 an ounce.
Demand for safe investment gave relief
According to analysts, bullion prices remained under pressure in the initial days of the week due to lack of concerns regarding the energy market and uncertainty regarding US-Iran talks. However, later reports emerged that there would be no immediate military action against Iran. This increased investor confidence and improved demand for safe investments.
Market experts believe that in the coming week, global economic indicators, decisions related to interest rates and geopolitical situation of West Asia will decide the direction of gold and silver prices.
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