Gold and silver prices saw a weak start to the week, driven by global geopolitical tensions following the breakdown of US-Iran talks. This uncertainty has led investors to adopt a cautious approach, impacting the precious metals market.
As of the latest data, MCX gold prices fell by Rs 1,239 to trade at Rs 1,51,413 per 10 grams, while silver prices experienced a more significant drop of Rs 5,986, reaching Rs 2,37,288 per kg.
The escalation of tensions in the Middle East has propelled crude oil prices upward, sparking concerns about inflation and dampening expectations of interest rate cuts by the US Federal Reserve. Consequently, precious metals have faced downward pressure.
CEO of Enrich Money, Ponmudi R, noted that gold is currently moving within a narrow range with limited buying support. A breakthrough above Rs 1,54,000 could bolster sentiment and drive prices towards Rs 1,55,000. Conversely, a dip below Rs 1,51,000 may lead to further declines.
Silver is also under pressure despite some backing from industrial demand. Ponmudi highlighted that if silver breaches the Rs 2,37,000 level, prices could decline towards the range of Rs 2,35,000–Rs 2,33,000.
The surge in crude oil prices, surpassing $104 per barrel, has exacerbated market unease following the collapse of US-Iran talks, heightening concerns of supply disruptions. This spike in oil prices has global inflation implications, potentially delaying central bank rate cuts, thus diminishing the attractiveness of non-interest-bearing assets like gold and silver.
Furthermore, the Indian rupee is expected to face strain due to the elevated crude prices, potentially impacting market sentiment along with fluctuating foreign investment flows, contributing to market volatility.
Experts anticipate a cautious outlook, with future movements in gold and silver hinging on geopolitical developments, oil price trends, and global investor sentiments in the days ahead.