Analysts predict bullion market volatility due to restrictions on silver imports, tensions between the United States and Iran, and economic data. Stay up to date on trends in gold and silver.
On the economic front, investors will closely monitor Chinese economic data, US housing figures, PMI data, weekly jobless claims and FOMC meeting minutes, they added.
On the Multi Commodity Exchange (MCX), gold futures rose by Rs 6,017, or 3.94 per cent, over the past week to settle at Rs 1.58 lakh per 10 gram.
Silver futures also rose by Rs 9,964, or 3.8 per cent, to close at Rs 2.71 lakh per kg.
“Gold traded on a strong positive note last week, gaining nearly 4 per cent on MCX and closing around Rs 1,58,000. However, the rally was largely influenced by the recent import duty hike of 6 per cent, which significantly lifted domestic prices despite weakness in international markets,” said Jateen Trivedi, vice president, commodity and forex research analyst at LKP Securities.
The restriction on silver imports does not mean that India has closed the door; It means the entrance is now guarded. “The supply is not stopped, it is channeled only through designated agencies like RBI banks, DGFT approved entities and jewelers through the bullion exchange.”
Two political measures in three days aim at currency management. Restricting silver imports facilitates the immediate outflow of dollars and reduces pressure on reserves, he added.
So while consumers will see higher domestic prices and wider spreads, the most important thing is to protect the external account. Silver is just the instrument, the forex market is the engine, Trivedi said.
In contrast, international bullion prices remained under pressure last week.
Comex gold futures declined $168.8, or 3.6 percent, over the past week to close at $4,561.9 an ounce.
Silver futures also fell $3.32, or 4.11 percent, over the past week to settle at $77.54 an ounce.
“Gold prices took a breather last week and closed with a weekly loss, weighed down by a sharp jump in the US dollar and bond yields globally, following higher-than-expected April inflation figures released in most regions including India, China and the US etc., leading to bets that interest rate cuts are unlikely in the near term,” said Pranav Mer, Vice President, EBG – Commodity & Currency. Research, JM Financial Services Ltd.
Bullion was also weighed when India, one of the world’s biggest gold consumers, raised import duties and took drastic measures to curb bullion imports amid concerns over the CAD and reduce dollar purchases and foreign fund outflows, he added.
However, oil prices have continued to rise 8 to 10 percent weekly, holding steady above $100 a barrel amid the lack of clarity over the US-Iran peace deal, while the ceasefire and Hormuz blockade still persist, Mer said.
Analysts said the rupee movement will also remain a key factor influencing domestic bullion prices, while fluctuations in crude oil and global macroeconomic developments could further shape market sentiment.
Market participants will also watch the transition at the US Federal Reserve, where Kevin Warsh will officially take over from Jerome Powell on Monday after Powell’s eight-year term ends, they added.
