After four consecutive weeks of decline, gold prices have again seen a rise. Market experts believe that the trend of gold may remain strong in the next week also. However, its direction will largely depend on the economic data coming from the major economies of the world including America and the signals related to the interest rates of the US central bank Federal Reserve.
Investors will keep an eye on these economic figures
Next week, investors will keep an eye on America’s service PMI, trade data and weekly unemployment claims. Apart from this, inflation data coming from Euro zone, China, Japan and Germany can also play an important role in determining the direction of gold and silver prices.
Experts say that if there is any major change in global developments or there is a sharp fluctuation in the prices of crude oil, then its effect can also be seen on the prices of precious metals.
Strong return of gold and silver in the domestic market
According to Pranab Mer, Senior Vice President (Commodity and Currency Research), JM Financial Services, gold may currently get good support in both domestic and international markets.
An increase of Rs 3,216 or 2.2% was recorded in the futures price of gold for August delivery on Multi Commodity Exchange (MCX) during the week. With this it closed at around Rs 1.47 lakh per 10 grams. At the same time, the futures price of silver for September delivery increased by Rs 13,938 i.e. 6.2% to Rs 2.37 lakh per kg.
Impact of dollar and interest rate signals
Research Analyst Jatin Trivedi of LKP Securities says that gold prices have been supported due to weakness in the US dollar and increased buying at lower levels. After about a month of weakness, the market seems to be gaining momentum again. He said that reduction in inflation pressure, stability in crude oil prices and changing expectations regarding Federal Reserve’s interest rates have affected the thinking of investors.
Support is also being received from the international market
In the international market too, a rise was seen in both gold and silver. Gold futures on COMEX closed 2.2% higher during the week at $ 4,187.30 an ounce. Whereas silver rose by 5.3% to reach $62.81 per ounce.
According to experts, increasing tension between Russia and Ukraine and increasing demand for safe haven have also supported gold prices. At the same time, according to the World Gold Council, in the month of May, the world’s central banks added 41 tons of gold to their reserves, which further strengthened the market confidence.
What will be the trend next week?
Experts believe that gold prices have received strong support at recent low levels. However, the market may remain volatile next week depending on the US dollar, bond yields and key economic data. In such a situation, investors are being advised to keep an eye on global developments and economic signals.
Leave a Reply