After ending last week on a strong note, gold and silver are now heading into a week full of major domestic and geopolitical events. According to analysts, the interest rate decision of the US Federal Reserve, fluctuations in crude oil prices and the emerging US-Iran conflict will be the major factors for bullion in the coming days.Market focus will not be limited to the Fed as investors will also keep an eye on US consumer confidence data, core personal consumption expenditure (PCE) inflation data, weekly jobless claims and monetary policy announcements from the Bank of England and the Bank of Japan.“Market sentiment will remain driven by developments in the US-Iran geopolitical situation, the direction of crude oil prices and their impact on inflation expectations ahead of the US Federal Reserve’s policy decision on July 29,” said Jatin Trivedi, VP Research Analyst (Commodity & Currency), LKP Securities.
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Recovery follows a shaky weekGold and silver recovered towards the end of last week after seeing sharp fluctuations due to developments in the oil market.According to analysts, Brent crude briefly reclaimed the $100 per barrel mark after Houthi attacks on Saudi-owned ships raised fears of supply disruptions. Oil prices subsequently fell due to profit-booking, leading to a rise in precious metals.In the domestic market, gold futures for August delivery rose by Rs 2,200, or 1.6%, to close at Rs 1.43 lakh per 10 grams during the week.Silver futures for September delivery also ended in the positive zone at the Multi Commodity Exchange, rising by Rs 5,735, or 2.7%, to Rs 2.22 lakh per kg.Global markets reflected this trend. Comex gold futures for August delivery in New York rose $52, or 1.3%, to $4,070.8 an ounce, while September silver futures rose $3, or nearly 5%, to $58.90 an ounce.The market is waiting for new signalsPraveen Singh, head of commodities at Mirae Asset Sharekhan, said bullion is likely to remain range-bound as traders continue to monitor developments around Iran.He also said China’s central bank continued to increase its gold holdings in May, providing continued support from official sector purchases.Apart from geopolitical developments, traders will be keeping a close eye on shipping activity through the Strait of Hormuz. The market will also analyze Federal Reserve Chairman Kevin Wersch’s comments after the policy decision for signals on the future path of US interest rates and the direction of bullion prices.