The talks between America and Iran next week can play an important role in deciding the direction of gold and silver prices. In this proposed conversation in Switzerland, US Vice President JD Vance is likely to discuss with Iranian officials. The market is closely watching the efforts to reduce tension between the two countries.
Experts say that if the talks remain positive then the risk appetite of investors may increase. This may weaken the demand for gold, which is considered a safe investment. At the same time, in case of any kind of uncertainty or increased tension, gold can get support.
Focus also on crude oil and Hormuz Strait
According to Pranav Mer, Vice President, JM Financial Services, the market will also keep an eye on the supply of crude oil and LNG through the Strait of Hormuz. This route is considered very important for global energy supply. If tensions increase in West Asia and oil supply is affected, crude oil prices may rise. This will have an impact on global inflation and investor sentiment, due to which changes in gold and silver prices may also be seen.
Why did gold and silver prices fall last week?
Last week, gold and silver prices declined due to strong rupee and weak demand. On Multi Commodity Exchange (MCX), the futures price of gold fell by Rs 3,325 or 2.2 percent and closed at Rs 1.47 lakh per 10 grams. At the same time, the future price of silver fell by Rs 13,001 or 5.3 percent to Rs 2.33 lakh per kg.
Dollar and Federal Reserve will also have an impact
According to Jatin Trivedi, research analyst at LKP Securities, the strong rupee and the tough stance of the US Federal Reserve have put pressure on gold prices. A stronger rupee reduces the cost of imported gold, thereby softening prices in the domestic market. There is pressure on precious metals in the international market also due to the strong dollar. However, concerns related to the Russia-Ukraine war are supporting gold to some extent.
What is the next sign?
Experts believe that the movement of gold and silver next week will mainly depend on geopolitical developments, energy markets and the direction of the dollar. If global tensions increase, the demand for safe investment in gold may increase. At the same time, pressure on prices may remain if tensions subside, dollar remains strong and rupee strengthens.
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