Bullion Market Awaits Fresh Cues From US-Iran Talks, Oil Prices And Economic Data This Week

Gold and silver prices are expected to remain sensitive to geopolitical developments, crude oil movements and a series of key global economic indicators this week, according to market analysts. Investor attention will be focused on upcoming talks between the United States and Iran, developments in energy markets and major macroeconomic data releases that could influence the outlook for precious metals. The spotlight will be on negotiations scheduled in Burgenstock, Switzerland, where US Vice President J D Vance is expected to lead discussions with Iranian officials. The talks aim to build on last week's framework agreement designed to reduce hostilities and revive nuclear negotiations.

Analysts believe the outcome could significantly affect global risk sentiment and energy prices, both of which play an important role in determining the direction of bullion markets. Pranav Mer, Vice President of Commodity and Currency Research at JM Financial Services, said precious metals are likely to witness a sideways-to-corrective trend in the near term. He noted that investors will closely monitor the progress of the Washington-Tehran negotiations, along with developments related to crude oil, liquefied natural gas (LNG) and other commodities passing through the strategically important Strait of Hormuz. Any disruption in energy supplies could alter inflation expectations and boost safe-haven demand for gold.

The precious metals market ended the previous week on a weaker note. On the Multi Commodity Exchange (MCX), gold futures declined by Rs 3,325, or 2.2 per cent, to settle at Rs 1.47 lakh per 10 grams, while silver futures dropped Rs 13,001, or 5.3 per cent, to close at Rs 2.33 lakh per kilogram. Analysts attributed the decline to a combination of lower energy prices, a stronger Indian rupee and the US Federal Reserve's relatively hawkish monetary policy stance. A stronger rupee reduces the cost of imported gold, thereby exerting additional pressure on domestic prices.

Also Read: Brent crude steady near $95 as Trump hints at progress in US-Iran negotiations amid uncertainty

Globally, Comex gold futures ended the week marginally higher at $4,245.9 per ounce, while silver futures slipped 2.03 per cent to $66.32 per ounce. Market participants also tracked reports from West Asia, where Iran claimed it had closed the Strait of Hormuz following fresh Israeli strikes in Lebanon. However, the US Central Command disputed the assertion and maintained that maritime traffic through the critical shipping route remained unaffected. While geopolitical tensions have supported safe-haven buying to some extent, analysts noted that investors remain focused on the broader implications of ongoing diplomatic efforts.

Apart from geopolitical developments, traders will closely watch the People's Bank of China's policy decision, flash manufacturing and services Purchasing Managers' Index (PMI) data from major economies, US housing statistics, Personal Consumption Expenditures (PCE) inflation figures and consumer sentiment readings. Comments from US Federal Reserve officials will also be scrutinised for indications regarding future interest-rate decisions. Domestic commodity markets, meanwhile, will remain closed during the morning session on Friday on account of Muharram, adding another factor for traders to consider during the week.

Also Read: Brent Crude Nears $93 As Geopolitical Risks Continue To Pressure Markets