Gold, Silver Outlook: Can Falling Crude Oil Prices Support Precious Metals' Recovery?

US President Donald Trump's indication that further military action against Iran is unlikely has raised hopes of de-escalation. This has helped ease concerns over a prolonged conflict and its potential impact on energy supplies.

Brent crude was trading around $91 per barrel, according to the market levels cited by Independent Research Analyst Anuj Gupta. Expectations that OPEC+ members could consider increasing production have also added to the outlook for oil supply.

Lower crude prices are significant because a sustained decline could ease inflationary pressures. This may influence expectations around the Federal Reserve's monetary policy and, in turn, affect gold prices.

Weak Dollar And Bond Yields Offer Support

A weaker US dollar and softer US bond yields have also been supportive for gold, as these factors can improve the appeal of non-yielding assets.

In the domestic market, the Indian rupee is another factor to watch. A stronger rupee makes imported gold and silver relatively cheaper, potentially limiting gains in domestic bullion prices even when international prices remain firm.

US Employment And Inflation Data In Focus

However, the outlook is not without risks. Stronger-than-expected US employment data have revived concerns that the Federal Reserve may keep interest rates higher for longer.

Upcoming US inflation data will therefore be closely watched for clues about the central bank's policy direction. Any indication of persistent inflation or a prolonged period of elevated interest rates could influence investor demand for precious metals.

Gold, Silver And Crude Oil: Key Levels To Watch

On the technical front, Gupta identifies support for international gold at $4,070 per ounce and resistance at $4,160.

For silver, the key support is at $50, while resistance is placed at $55. Brent crude has support at $85 and resistance at $100 per barrel.