After the huge fall last week, gold and silver prices may see stability with slight recovery in the week starting from Monday. However, the upside in prices appears to be limited due to high interest rates and a strong US dollar. Important global indicators coming this week will play a big role in deciding the direction of the market. Investors will keep an eye on key economic data like PMI data of manufacturing and service sectors of US, UK and Japan, consumer sentiment and jobless claims. Along with this, fluctuations in crude oil prices will also affect the commodity market.
Mild recovery possible with some stability in prices
According to Pranab Mer, Vice President (Commodity and Currency Research), JM Financial Services, a slight recovery is possible with some stability in gold prices this week, after which the market will decide its next direction. A huge fall was recorded in precious metals in the domestic market last week. On Multi Commodity Exchange (MCX), silver fell by Rs 32,663 or 12.59% and closed at Rs 2.26 lakh per kg. At the same time, gold fell by Rs 13,974 or 8.82% to Rs 1.44 lakh per 10 grams. Pranab Mer said that selling pressure continued in gold throughout the week and prices slipped below Rs 1.45 lakh per 10 grams, which shows a big fall of about 9-9.5%.
Less likely to cut interest rates
The decline intensified in the middle of last week, when major central banks – the US Federal Reserve, the Bank of Japan, the Bank of England and the European Central Bank – expressed concerns about rising crude oil prices and inflation. It is clear from these indications that at present there is little possibility of cutting interest rates. Precious metals remained under pressure in international markets also. Silver futures on Comex fell 14.36% to $69.66 an ounce, while gold fell 9.6% to $4,574.9 an ounce.
gold in the coming weeks
According to NS Ramaswamy, Head (Commodity and CRM), Ventura, gold may trade with weakness or stability in a limited range in the coming weeks. Prices may regain some balance after the recent decline, but intraday volatility will continue. He said that the strong US dollar around the 99-100 level and high interest rates are hindering the recovery of gold. Also, with the US Federal Reserve postponing rate cut expectations and increasing inflationary pressure due to rising energy prices, the market has now pushed forward monetary easing expectations to 2026, thereby reducing the attractiveness of gold. However, demand for gold is expected to remain strong in the long run, as global central banks are in no mood to change their gold purchasing strategy.
Wedding season and Akshaya Tritiya will provide support
Geopolitical uncertainties have provided limited support, but gold still remains a safe haven, which keeps prices from falling to some extent. There is a possibility of increase in demand in the domestic market due to the upcoming wedding season and festivals like Akshaya Tritiya, which may support gold and silver prices in the near term.