Gold, silver outlook hinges on US-Iran tensions, global inflation data next week

Gold and silver prices are expected to remain under pressure next week as investors keep a close eye on developments in the US-Iran conflict and movements in crude oil prices, as well as key inflation data from major economies, according to analysts. Inflation data from China, the US, Germany, Japan, and India will be particularly important, as will speeches by Federal Reserve officials and US employment figures.

Geopolitical developments, especially tension between the US and Iran, will continue to drive the market. The domestic commodities market will be shuttered during the morning session on Tuesday for Diwali-Balipratipada. Analyst Pranav Mer of JM Financial Services Ltd. explained that investors will also track progress in US-Iran negotiations and Russia-Ukraine peace talks.

Gold futures for December delivery on the Multi Commodity Exchange gained 3% to close at Rs 1.42 lakh per 10 grams, while silver futures rose 3.15% to settle at Rs 1.84 lakh per kilogram. Internationally, Comex gold futures advanced 4.5% to close at $4,074.9 per ounce, while silver gained 5.4% to settle at $51.94 per ounce. Bullion prices initially suffered from stronger-than-expected US nonfarm payroll data and rising consumer sentiment, which boosted the dollar and Treasury yields.

However, the rally ended with a strong weekly gain of over 4%, following a mid-week surge after Democrats' victory in the US midterm elections. Analysts noted that precious metals recovered due to bargain buying at lower levels and short-covering, but gains were limited by a correction in industrial metals, particularly copper. The rally was also fueled by safe-haven demand following declines in AI, data center, and technology stocks globally, especially in the US.

However, bullion futures faced selling pressure on Friday, closing near $4,074 and $52 per ounce, respectively. In the domestic market, prices may experience moderate fluctuations, influenced by global cues, currency movements, inflation trends, and Diwali festivities.