Gold and silver prices could face fresh pressure next week despite a strong rally, analysts said. Gold futures rose 4.5% and silver climbed 5.4% internationally last week. Investors now await US inflation data on November 10 and monitor US-Iran tensions. These factors will likely influence future interest rate decisions.
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Gold and silver prices could come under renewed pressure in the coming week despite a strong recovery in global markets, as investors await US inflation data and assess fresh military strikes on Iran for clues on interest rates and the direction of precious metals, analysts said.
The caution follows a week of gains in which gold futures rose 4.5% and silver climbed 5.4% internationally, recovering from losses in previous sessions.
According to PTI, Comex gold futures for December delivery gained $176 during the week to settle at $4,074.9 per ounce, while silver advanced $2.6 to $51.94 per ounce.
On the Multi Commodity Exchange (MCX), December gold futures rose Rs 3,682, or nearly 3%, to close around Rs 1.42 lakh per 10 grams. Silver gained Rs 5,655, or 3.15%, to settle around Rs 1.84 lakh per kilogram.
Why analysts expect pressure on gold and silver
"Gold and silver's momentum remains down as investors will focus on the inflation data from China, the US, Germany, Japan, India, etc along with some Fed officials' commentary," Pranav Mer, Senior Vice President, EBG - Commodity & Currency Research, JM Financial Services, told PTI.
The upcoming US consumer inflation report, scheduled for November 10, will be closely watched for indications of the Federal Reserve's next interest-rate move.
India's October retail inflation figures are scheduled for November 12, while Chinese economic indicators will provide further signals for industrial metals.
Higher interest rates can weigh on gold because the metal offers no interest income. A stronger dollar also makes dollar-denominated bullion more expensive for holders of other currencies.
US-Iran tensions add to uncertainty
Geopolitical developments remain another concern.
US President Donald Trump confirmed limited American strikes against Iranian air defence systems on Qeshm Island on Friday, while claiming Washington had made "a lot of progress" in negotiations with Tehran.
Mer said investors would track developments in US-Iran peace negotiations and Russia-Ukraine talks alongside crude oil prices.
Oil movements have become particularly relevant for bullion markets because higher energy prices can add to inflation concerns and influence expectations for monetary policy.
Why gold and silver retreated on Friday
Precious metals recovered sharply during the week, supported by bargain buying, short-covering and demand for safe-haven assets following a sell-off in global technology and AI-related stocks, PTI reported.
However, the rally lost momentum on Friday after stronger-than-expected US employment data boosted the dollar and Treasury yields.
Mer said bullion had initially faced pressure from stronger US nonfarm payroll figures and improving consumer sentiment before recovering during the week.
He attributed part of the midweek rally to the US midterm election outcome, which saw Democrats secure control of both chambers of Congress.